. The $464 million “reserve” in the
2001–2002 budget adopted by the
legislature in June turns out to have
been based mainly on wishful thinking.
Because of tax cuts approved by voters
on the June ballot, along with the
continuing recession and other events
affecting income and expenses, the
actual reserve in prospect may be as
low as $7 million.
The author is probably leading to which
of the following conclusions?
A. These facts warrant an
investigation into who squandered
$457 million.
B. A reserve in the budget is not so
necessary as we might wish it to be.
C. The legislature would be wise not
to add any new spending to the
budget adopted in June.
D. The recession will probably not
last much longer, but while it does
the legislature must adjust the
budget accordingly.
E. Legislative budgets are typically
careless and unheeding of variable
factors that may affect their
accuracy.