California’s Budget Black Hole: Where Did the $97.5 Billion Surplus Go?

A review of California Governor Gavin Newsom’s State Budgets 2019-2023

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In June of 2022, the California legislature passed Gov. Gavin Newsom’s $300 billion budget – the largest in state history.

In June 2021, the California Legislature passed Gov. Newsom’s $262.6 billion 2021-2022 budget.

In June 2020, the California Legislature passed Gov. Newsom’s $202.1 billion state budget, confirming state spending for the 2020-2021 fiscal year.

In May 2019, Gov. Gavin Newsom released his revised budget, highlighting the largest tax revenue windfall in California history. Gov. Newsom’s first budget approved in June of 2019 contained a record number of local pork-barrel projects injected by individual legislators into California’s largest state budget ever (at the time) of $215 billion. California Globe covered in great detail this record making budget.

For context, when Gov. Jerry Brown returned to office eight years earlier in 2011, his first state budget was $98 billion, and increased to $200 billion by 2018 — a 110 percent increase in eight years, with a population increase of just three million.

In just his first five months in office, Gov. Newsom increased the state budget $5 billion – even with a tax revenue windfall.

One year ago in November 2021 the Globe reported, “California will have a $31 billion surplus next year,” according to the 2022-2023 California state budget Fiscal Outlook report compiled by the Legislative Analyst’s Office.

The tide completely turned in one year.

By November 2022, the Legislative Analyst’s Office reported California revenue is $41 billion below expectations, likely resulting in a massive $25 billion shortfall in the 2023-2024 state budget. The LAO recommended lawmakers start cutting the budget as they begin the January session.

The perfect storm for a recession may be upon us with high inflation, high taxes, high energy costs, high food costs, a sizable budget deficit, and now tens of thousands of big tech layoffs, which is the other issue California lawmakers and governor need to address, the Globe reported. Meta, Twitter, Salesforce and Amazon are all cutting thousands of staff. The potential for, or early economic ramifications to the cities and counties in which they reside, as well as the state, and the ripple effect these could have on startups and investment banks, looks to be immense.

Apropos, Gov. Gavin Newsom presented a $297 billion 2023-2024 budget plan on Tuesday, just $3 billion less than last year, but with a projected deficit of $22.5 billion. That’s down from a stunning $97 billion surplus last year. Where did the surplus go?

The 2023-2024 budget is $82 billion more than Newsom’s first budget in 2019, which was $215 billion. And California is is not growing – the state is bleeding businesses and losing hundreds of thousands of residents to other states.

In 2019, State Sen. Jim Nielsen noted that the state budget was flush $21 billion in surplus revenue. “But that’s not enough for some in the majority party,” Nielsen said. “They want more. They want to raise taxes on water, fertilizer, dairy, tires, guns and businesses.” Nielsen asked, “Why does the state need to raise taxes when there’s $21 billion in surplus? They are spending their way into another crushing deficit that will harm the poor, blind and disabled, and squeeze the middle class once again.”

Sen. Nielsen was right – that spending was the pork-barrel projects injected by individual legislators into California’s 2019-20 state budget.

Responses to Gov. Newsom’s 2023-2024 budget

Remember, last year California Democrats spent a historical budget surplus of $97 billion. “California Governor Gavin Newsom said Friday that his state has a record $97.5 billion operating surplus, as high tax rates on its wealthiest residents mean he has more cash to fund liberal priorities such as education and health care,” Bloomberg reported just last May. “That figure surpasses the staggering $38 billion that they had at their disposal during the previous budget season, then considered the biggest.”

How exactly did the governor and State Democrats make a $125 billion swing in revenue in one year from budget surplus to budget deficit?

“Where did that f-ing money go?” one local taxpayer asked me Tuesday as we discussed the budget.

According to Bloomberg, Newsom’s spending plans included:

  • $11.5 billion to every eligible registered vehicle owner, capped at two $400 checks per individual
  • $2.7 billion for emergency rental assistance
  • $2 billion for affordable housing production
  • $1.4 billion for overdue utility bills
  • $933 million for hospital and nursing home staff
  • $750 million for free public transit
  • $125 million to bolster access to reproductive health services

The Globe will research exactly how the surplus was spent.

Senator Shannon Grove (R-Bakersfield) responded to Gov. Newsom’s 2023-24 state budget proposal:

“Governor Newsom’s budget is a band aid on the damage that his over-taxing, over-regulating, and over-spending has done to California’s families and businesses. His budget continues to push the same policies that have resulted in the highest cost of living, the highest poverty, historically high crime rates and a worsening homeless crisis. Where is the accountability? He has spent $30 billion of our tax dollars on housing affordability proposals, but California still has the most unaffordable housing market in the country. Tens of billions have been spent on homelessness but California has the nation’s highest number of homeless.”

Gov. Newsom says he “prioritized the issues that matter most to Californians — despite declining revenues.” Oh, and he’s “transforming education.” Yikes.

One Twitter follower replied, “Transforming education by what, adding a daycare? Seriously? How about improving math and literacy scores?”

Assemblyman Vince Fong (R-Central Valley), Vice Chairman of the Assembly Budget Committee said:

“The Governor’s rhetoric does not match reality. Facing a $22 billion deficit, Governor Newsom’s budget continues his misguided habit to overspend with little accountability. Newsom’s budget again fails to adequately build water storage and conveyance infrastructure to store water and move it across the state. And this budget framework perpetuates ill-conceived energy policies that will stifle needed affordable and reliable energy supplies when Californians are demanding relief.”

Assembly Republican Leader James Gallagher (Yuba City) said:

“Democrat politicians have wasted a record surplus on new social programs and pork projects, while allowing our aging infrastructure to crumble. Now we are faced with a $22 billion deficit as a result of their fiscal recklessness. It’s high time we refocus our budget on the core functions of government.”

“As California bounces between flooding and drought, it is abundantly clear that we need new water storage, and yet there is still no dedicated funding this year or next to meet that need. Instead the Governor protects failed programs that haven’t made a dent our state’s highest-in-the-nation poverty rate.”

Senate Budget Vice Chair, Senator Roger Niello (R-Fair Oaks) said:

“California’s assumption of unending higher revenue, combined with overspending on misguided priorities, led the state down the path to the deficit we have today. And this is in contrast to other states that are considering tax rebates at this same time.”

“Republicans fought to fill the Rainy Day Fund, and we applaud today’s commitment to not tap into it. Recent on-going spending by the governor must be re-evaluated. The governor continues to celebrate how much he spends, but California has yet to see the results.

California Senate Minority Caucus Chair, Senator Janet Nguyen (R-Huntington Beach) released this statement prior to Governor Newsom’s budget proposal announcement:

“Drive down the street,” said Senator Nguyen. “Turn on the news. Go to the gas pump. There are harsh realities facing Californians up and down this state. Taxpayers cannot afford more empty promises and failures. We want results.”

Under Gov. Newsom’s watch, homelessness has increased exponentially, crime is historically high, freedoms have been restricted, taxes greatly increased, non citizens receive health care for free, public school kids’ math and literacy scores are in the toilet, the government-created water shortage has gotten worse…

Click here to read the full article at the California Globe


  1. The Governor, in the deep, deep pocket of the teachers’ unions, does not have to worry about math or literacy scores. He can just label them “racist” and voila, the problem goes away. By the time China has completely eclipsed our citizens in every field of endeavor, and the tech companies hire only Chinese and East Indians who do value STEM education (because there are too few graduates of American private schools), Newsom will be President and will have declared all Americans–including persons of color– who decry the infusion of foreign workers taking important core technical jobs as “racist” in order to devalue the issue. And yes there is a solution to this problem, it requires every person living here who cares about their children advancing in the world to remove their children from the public school system so that the Woke teachers’ unions are forced to collapse from lack of members.

    • Stan Sexton says

      Newsom doesn’t have a chance against DeSantis or anyone else when the public learns that Gavin Newsom is a Davos Man, anointed the title “Young Global Leader ” by Dr. Klaus Schwab in Davos in 2005. Newsom is deep into The Great Reset like his fellow YGL Justin Trudeau, who is ahead of Newsom in the race to Globalist Totalitarianism. They like the Chinese Economic Model, Depopulation, Neo -Fascism and Techno-Feudalism. To see the list of Traitors, go

  2. Decades ago in California’s pro growth heydays the budget had 10% for social services and 40% for infrastructure. Today it is the REVERSE. Our socialist Pied Piper governor Newsom is tooting his flute while our beautiful state is going over a cliff. Far left California is once again leading the nation, only this time it is into a depression.
    Fortunately, redistribution for votes gets harder when the well goes dry.


  4. If you ask that question Steve your mind is set in concrete and that certainly limits IQ. Too bad.
    Where is your reasoning and deductions in the face of facts presented? Marijuana can have a debilitating effect.

    • Steve Douglass says

      My mind may be set in concrete but since you mentioned “facts”, to which are you referring?

      I’m not trying to rock any ones boat but from all I have researched the words “no widespread voter fraud” is what’s being said.

      I do agree that there was voter fraud from a number of individuals but not enough to change the outcome.

      Seriously, I would like to know exactly the sites you visited to get this information so I can see for myself.

      Can you provide a few links?


    • Steve Douglass says

      Oh that guy, how’s his Dominion lawsuit going? You can’t go around making wild accusations about a legitimate company with out any proof and expect to walk away. Seems Fox and OAN are in the same boat.

      I find it very hard for me to believe anything he says even though he can make sound convincing. And if he had real proof you would think he can get a lawyer and take to court but you can always donate to his legal funds and buy his discount pillows.

  6. If you have preconceived notions before you seriouly look at the i fo you will not see it.
    His channel has rerun of his three day symposium on the digital proof found.

    Also. Have you not heard about tge Arizona election of 11/22?
    This obvious fraud is in court right now. Kari Lake will take the Gov seat.

    If you do not seriously follow news you will not see these pieces come together

    • Steve Douglass says

      Is this the same cyber symposium where he offered to give anybody $5 million dollars to prove the data false and then removed his offer? The same one where he got caught buying his 37 terabytes from a shady hacker? The same one where his own cyber expert said that you can’t really prove anything from this data? The same one where tech attendees where never provided with the promised data to inspect?

      As for Ms Lake, her day in court has not played out yet so I can’t give you an answer there.

      I do try to keep up with the news.

      • Steve
        All your cited examples from that Sympodium of August 2021 are incorrect actually. So again i am suspect that your common source of go to political information is faulry.
        Please open your mind and change the station.
        There is more excellent truth in new each day from Roku stations like real americas voice to podcasts on and and
        Sooo many others.

        In any case tge truth will be shocking you in tge near future no matter what.
        Than all Americas will stand together and make a difference.

  7. Check the Democrat leadership’s pockets, that’s where I believe the money can be found.

  8. How about giving illegal aliens unemployment benefits.

  9. We may never know why the courts refused to take up the many complaints about recent elections. What we do know is the democrats acted very guilty when they absolutely refused to allow any 3rd party investigations into the complaints. The mail in ballot number increases were very hard to accept. The liberal legislative COVID changes to voting rules only by democrat run states were very suspicious. The proven inaccuracies of many of the states voter rolls (Judicial Watch) remain very suspicious. If 3rd party investigations had been agreed upon, the Jan 6th demonstrations would likely never have happened. If investigations were done, half of America would still believe in our election system. And liberals could say “We were proven right” instead of “We were right, shut up!”.

  10. Americans are being taken for fools of which many are. But the truth will prevail and the idiots will die off and be forgotten soon enough.

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