California lawmakers face a ballooning budget deficit

The biggest challenge facing lawmakers and Gov. Gavin Newsom is the state budget deficit — and it just got bigger.

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Today, the Legislative Analyst’s Office projected the shortfall as $15 billion higher, or $73 billion.

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The analyst’s office had pegged the 2024-25 deficit at $58 billion in January, using Newsom’s revenue estimates when he presented his initial budget proposal of $292 billion. 

On Friday, Newsom’s Department of Finance reported that preliminary General Fund cash receipts in January were $5 billion below (or nearly 20%) the governor’s budget forecast. Unless state tax revenues pick up significantly, the bigger number will make it more difficult to balance the state budget just through dipping into reserves and targeted spending cuts. 

But exactly how the state can dig its way out — at least in the Assembly — remains to be seen. Speaker Robert Rivas told reporters today that the budget has been at the forefront of conversations among Assembly Democrats and that he is very concerned with the growing deficit.

He praised the governor’s commitment to preserving classroom funding, and said he didn’t see a way to avoid dipping into the state’s reserves, as the governor’s January budget plan proposed — though the speaker urged a prudent approach to using rainy day savings in case the budget picture worsens in future years. 

“We are very concerned about short-term fixes for long-term problems,” said Rivas, who took over as speaker last summer, just days after the Legislature and Newsom reached a deal on the 2023-24 budget that covered a $30 billion deficit after two years of record surpluses.  

“Clearly, we need to prioritize oversight and curb spending and our investments,” Rivas added.

In the coming weeks, Rivas’ plan calls for an oversight budget subcommittee he formed in December to review the state’s spending on housing, he said. 

Click here to read the full article in CalMatters

Comments

  1. The biggest challenge these bozo’s face is reality.

    No intelligent person offers free healthcare to illegal aliens in the face of a multibillion dollar shortfall. Business is already running not walking to leave the state. Meanwhile the Democrat majority are busy increasing the minimum wages for private business, increasing energy costs and passing more gun regulation because those are their priorities. Every honest citizen in California needs to have a gun for self protection because they refuse to enforce laws and punish criminals.

    If they say the deficit is $68 billion it is probably really $120 Billion. For those of you fellow California voters keep voting for these morons I hope you enjoy taxes, fees, and unemployment.

  2. Newsom is groomed to be Biden’s sudden replacement. He is fond of saying “as goes California, so goes the nation.” He’s going to feel right at home in Washington where budget deficit spending is out of control. (Discussion on Armstrong & Getty show today)

  3. Wait till all the illegals who are eligible for mediCal start using their free healthcare. Already 1/3 of the CA residents are on mediCal. The reimbursement is the lowest for docs who can’t make a living on it. We’re seeing the decline of a once great state being demolished by dems who have never balanced a budget in their lifetime.

  4. Leo of Sacramento says

    38 Billion in the hole…..58 Billion in the hole….now 73 Billion, in he hole.
    100 Billion surplus!!! That was only a y ear ago. Overspent by how much? 200%??? Funny.

    These are the people, who SAY they ‘ know how to write checks, because they are business men/women!’
    These are the people who ASK, “What business have YOU owned?”
    These are the people who WE have elected, to be responsible for OUR tax dollars.

    Really? YOU PEOPLE, can’t be educated business men/women. If you ran your company(ies) like you’re running this State? You’d be broke, bankrupt, foreclosed on and irrelevant to history if it were true and you did. Please……………..

    Why am I running for State Gov??? See above, and re-read the article.
    What BUSINESS experience do I have? I know you don’t spend 200 dollars if you only have 100 for the meal.
    What education do I bring? I know simple math: 290 BILLION budget means you only spend 285 BILLION. If you’re short by 80 BILLION, then you remove some budget items. It’s that easy.
    But, but, WHO/WHAT would you cut? (smiles)

    1) The EDD Director, their manager staff, and a good portion of supervisors there for LOSING the 36 BILLION they oversaw and were responsible for;
    2) That train to nowhere
    3) the 22 BILLION we’ve dumped into homelessness groups that has only Increased homelessness in our State;
    4) 10% of ALL State agency budgets;
    5) 80-90 of ALL excess State openings NOT filled with Staff…..ie, their employee slush funds;
    6) MEDI-CAL for non-citizens;
    7) The DMV Director, manager staff for their LACK of modernization efforts costing taxpayers millions;
    8) The CAL Health Director and anyone else, responsible for covering up the Chinese Bio Warfare Lab information in REEDLY, CA;
    9) CPUC Commission personnel;
    10) State funding on anything for any city that embraces “Sanctuary status” in this State.

    That would be a start. I’d work on the other items with the Assembly, unless they refuse to work toward an HONEST solution to THEIR problem, that being: Overspending, over taxing, over regulating our citizens.

    That would be the start point.
    If you LIKE the high costs of living, the high utility costs, the high Crime, the high taxation, then you WON”T be voting for me. If you want, expect and demand changes?
    Vote Leo Naranjo IV, CA STATE GOV 2026!!!

    It’s that easy.

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