Unionbancal Corp : California's Economic Growth May Have a Downside, Says Union Bank Senior Economist Keitaro Matsuda; Recent State Budget Surpluses Mask Structural Problems, Delay Reform
Union Bank of California (NYSE:UB):
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WHAT: Keitaro Matsuda, senior economist for Union Bank of
California, today released his August 2006 Economic
Report, which points out that a healthy California
economy may be masking old state budget challenges
that will eventually resurface. The report, titled
"Economic Growth Diminishes the Prospect for a
Long-term Budget Fix," is part of a monthly series
produced by Union Bank of California on the
California, Pacific Northwest and U.S. economies.
WHY: The August 2006 Economic Report discusses specific
challenges to a budget solution:
-- California derives much of its revenues from
income taxes, resulting in significant
year-to-year variances
-- Major expenditures, such as education and
social programs, are stable and gradually
rising with a growing population
-- Borrowing has been a more palatable solution to
recent budget shortfalls than structural reform
-- The 2006-2007 state budget assumes that a
strong economy will again deliver big increases
in revenue, but high energy costs and rising
interests rates are expected to cool state and
national economies
WHO: Keitaro Matsuda has served as senior economist for
Union Bank of California since 1997. He monitors
economic trends and developments for Union Bank
management and customers. Mr. Matsuda is also a
member of the economic advisory committee of the
American Bankers Association. Union Bank of
California, the wholly owned subsidiary of
UnionBanCal Corporation (NYSE:UB), provides a broad
range of financial services to consumers, small
businesses, middle market and large corporations.
AVAILABILITY: The August 2006 Economic Report is available upon
request.
INTERVIEW: Keitaro Matsuda is available for interviews to share
his insights about local, state and national
economies. Please contact Katie Pandes or Stephanie
Goddard to schedule an appointment.
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