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In February, we noted that California cap-and-trade auction revenues likely would be much higher than assumed in the Governor's January 2015-16 budget proposal. With its May Revision to the 2015-16 budget proposal, the administration assumes a total of $3.4 billion in total cap-and-trade revenue in 2014-15 and 2015-16, which is $1.7 billion more than reflected in the January budget proposal.

As we discuss in this handout on the May Revision cap-and-trade proposal, the administration's May Revision revenue assumptions seem reasonable. We note the significant uncertainty surrounding future cap-and-trade auction revenues.

For all of our office's responses to the Governor's May Revision, see our May Revision page here.