April 14--REPORTING FROM SACRAMENTO -- California's drought has threatened farmers, ski resorts and golf courses, but it's unlikely to do much damage to the state's overall economy or budget, according to a new report from legislative analysts.
The report, released Tuesday, said "we currently do not expect the drought to have a significant effect."
The reason is explained by the lopsided relationship between water use for farming and agriculture's overall contributions to the state's economy.
Farmers consume four times as much water as California's cities and towns, and they produce a huge portion of the country's crops. But they contribute only 2% to the state gross domestic product, and just 3% or 4% of Californians work in agriculture.
"Even a substantial decline in agriculture's share of the economy, such as occurred during and after the 1976-77 drought, probably would have only a limited impact on the overall state economy," the report said.
That means tax collections are unlikely to suffer. In fact, revenue was $1.3 billion ahead of projections at the end of March, according to the nonpartisan Legislative Analyst's Office, which provides budget advice to lawmakers.
In response to the drought, Gov. Jerry Brown ordered a 25% cut in water use in urban areas, and there are new restrictions on watering lawns and golf courses.
"These are noticeable changes," the report said, "but they seem unlikely in and of themselves to result in a significant drag on the state's economy."
Legislative analysts warn that the drought is still "a risk factor for the state's economy, especially if its effects worsen or are prolonged."
FULL COVERAGE: Chronicling California's drought
