Jerry Brown predicts California budget surplus by end of next year

After years of red ink, Gov. Jerry Brown said on Thursday that California’s $96.7-billion general fund is now poised to end next year with a surplus, thanks to years of deep budget cuts and billions in new taxes approved by voters last year.
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"We achieved the position we're in because of tough cuts ... and then the people voted for taxes," he said. "We broke the logjam by going to the people."

Schools will be the big winner in the governor's new spending plan, receiving $56.2 billion in state funds, an increase by $2.7 billion over the last year. That funding is set to jump to more than $66 billion by 2016.
The budget also dedicated an additional $350 million to the state’s public insurance program, Medi-Cal, to help implement President Obama’s healthcare law.

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Retail sales point to firmer consumer spending

Retail sales rose more than expected in December as Americans shrugged off the threat of higher taxes and bought automobiles and a range of other goods, suggesting momentum in consumer spending as the year ended.

So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, increased 0.6 percent after advancing 0.5 percent in November.

The second straight month of gains in core sales suggested consumer spending picked up in the fourth quarter after rising at a annual pace of 1.6 percent in the July through September period

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