Walters: Economic reality bites as Newsom faces a big California budget problemWalters:

During his much ballyhooed, nationally televised debate with Florida Gov. Ron DeSantis last week, California Gov. Gavin Newsom boasted that the state’s economy is “booming” and leads the nation.

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“California has no peers,” Newsom declared. “California dominates.”

About 18 hours later, reality reared its ugly head. The Legislative Analyst’s Office revealed that state tax revenues are running tens of billions of dollars behind expectations due to a slowing economy, creating a monumental budget headache.

The dilemma became apparent when the November income tax filing deadline – seven months later than the original date – passed, and tax receipts for 2022 could finally be counted.

“With the recent receipt of various postponed tax payments, the impact of recent economic weakness and last year’s financial market distress on state revenues has become clearer,” the LAO authors said in a preliminary report on the state’s fiscal situation. “The postponed payments came in much weaker than anticipated.”

LAO analysts Brian Uhler, Chas Alamo and economist Seth Kerstein estimated that 2022-23 revenues are $26 billion under projections and “our updated revenue outlook anticipates collections to come in $58 billion below Budget Act projections across 2022-23 to 2024-25.”

California, they said, started seeing an economic downturn in 2022 as the Federal Reserve System raised interest rates to tame inflation.

During his much ballyhooed, nationally televised debate with Florida Gov. Ron DeSantis last week, California Gov. Gavin Newsom boasted that the state’s economy is “booming” and leads the nation.

“California has no peers,” Newsom declared. “California dominates.”

About 18 hours later, reality reared its ugly head. The Legislative Analyst’s Office revealed that state tax revenues are running tens of billions of dollars behind expectations due to a slowing economy, creating a monumental budget headache.

The dilemma became apparent when the November income tax filing deadline – seven months later than the original date – passed, and tax receipts for 2022 could finally be counted.

“With the recent receipt of various postponed tax payments, the impact of recent economic weakness and last year’s financial market distress on state revenues has become clearer,” the LAO authors said in a preliminary report on the state’s fiscal situation. “The postponed payments came in much weaker than anticipated.”

LAO analysts Brian Uhler, Chas Alamo and economist Seth Kerstein estimated that 2022-23 revenues are $26 billion under projections and “our updated revenue outlook anticipates collections to come in $58 billion below Budget Act projections across 2022-23 to 2024-25.”

California, they said, started seeing an economic downturn in 2022 as the Federal Reserve System raised interest rates to tame inflation.

Click here to read the full article in CalMatters

Comments

  1. I totally agree with NewScum……..”California has no peers”, ’cause they’re ALL leaving the state!!!!

  2. Well Pompador it’s your party that has caused the crap economy. Yep you democrats own it. Ya all have killed any incentive for business owners to stay in California. You coddle the criminals, the homeless, the left wing commies. And any other group with their had out for taxpayers money. You continue to blow billions of taxpayers money on the loser train to nowhere. Yet our roads, schools, bridges fall apart and in dis repair. You all continue to do road work with the highest cost in labor but use the cheapest materials specified, and the public wonders why that expensive road fix already look like crap a year from now.

  3. Newsom has extreme disdain for Californians but he is not the only problem in Sacramento. They see citizens as a revenue source to be harvested. Unfortunately California voters are morons and keep electing these shill like Newsom.

    One does not have to look far to find the “truths” of the states moral and economic decline. I am going to say that the actual deficits will probably be significantly larger than forecasted.

    You can expect according that the FTB and Sacramento will ramp up taxes and fees to offset these shortfalls.

    Bend over California, here it comes.

  4. Gavin Newsom is like the guy who tries to sell you junk bonds and the the end who gets screwed is you…Do you know how Gavin Newsom can say screw you to Calif without really saying screw you?? He says TRUST ME…

  5. If Senile/Predatory/Incompetent/Corrupt Biden is re-elected, we can rely on federal bailout money dispatched to cover California’s fiscal problems. Quid pro quo for his glowing defense of Biden during the De Santis matchup. After all, there is no limit in the amount of money the federal government can create out of thin air. Gav-Man, you are such a rock star in your own mind and have convinced enough Californians of this delusion that you remain governor despite an abysmal record. Aunt Nancy is also proud of your ‘record.’

  6. Let’s see. Paying for hotel rooms, health care and everything else for illegals. Paying for increased salaries and pensions for CALPERS employees who are already overpaid and over-pensioned. High gas taxes and fees for everything. Is this Cloward-Piven? Or just a WEF “Young Global Leader” helping to cause an Economic Collapse? http://www.maloneinstitute.org (2008)

  7. Leo of Sacramento says

    Hello all,

    This is my first time posting on this site, so I hope you’ll forgive me for my nuances.
    Looking at the remarks to this entry, I find it…uh, interesting. A lot of vocal discontent; some hostilities, sarcasm and commentaries. But, what are the solutions? Does anyone have any idea, on how to combat this?

    We live in a wonderful state, that has endless miracles of creation in it. We are also witnessing these very things, squandered by our political parties. Yes, I said both. I’m fed up. I’m fed up with ‘know it alls” who don’t know Jack. I’m fed up with how this State is being ran. I’m fed up with people leaving in droves. (I get WHY they’re leaving, but I’m saddened that they have no fight) From what I’ve been told, there won’t be a fight, because OUR side doesn’t want to fight for CA. OUR side, considers this a ‘ lost cause.’ Mind you, they WON”T tell our voters that mess, however.

    IT”S TIME. Time for changes. Time for a different approach. TIME, for alternative options.
    I’m going to include MY platform on this blog entry, that will hopefully, spark some lightbulbs into action. I personally am hampered by my employer in officially making an announcement to run for elected (partisan) office in this state. That will change, come MAY 2024. The election is for 2026.
    Three DEMO”s have already announced their formal run for Gov. Not ONE Repub has reciprocated. What are we waiting for? Opportunity? A Golden child? A path to further political gain? pfffftttttt…….
    “Lead, follow, or get out of the way.” That was our basic training motto. It fits, here. To the ney sayers, I’ll respond with this:
    1) “What’s my experience?” Look at what you have now, who say THEY are experienced. What have they done? If anything, I’m over qualified.
    2) “Have you ran any businesses before?” No and neither have they, for if they ran their so called, BUSINESS, like they’re running CALI, it would have been bankrupted and history.
    3) “How much money do you have?” That’s the sticky point. How much money can the party help me raise? If all of brian dahle’s supporters (4.46 million voters) joined with me and send in $10.00 per person, that would give us a 44 MILLION dollar war chest.
    4) “A Republican can’t win in California.” Says who? If you never TRY, you’ll never win. This current political atmosphere is RIPE, with reasons too win. Unless no one ever stands up to make the attempt. I’m not talking about a grab-butt attempt. Not a ladder climber; carpet bagger; opportunist or otherwise. We need someone who WANTS the job, cares for the State, and is willing to take on the establishment.
    I hope to earn your vote, your financial support and your TRUST, for this race. Thank you for your time.
    ==============================

    My name is Leo Naranjo IV (R),

    One of the things I’d like to see, is for California to return back to the land of opportunity. Opportunity to grow, to excel, to advance, to learn, to live to thrive! I want the Golden State to return to being GOLDEN, not just for some but for all. I would like to see the CALIFORNIA DREAM be just that: A place where people can dream and see those dreams come true. I don’t know what happened, when our dream become a nightmare. To many drugs, to many homeless, to much crime, to many excuses, to much apathy and not enough accountability/responsibility or results. To many promises and flowery words, with the same results: higher taxes, higher crime, higher prices and high homelessness. IT’S TIME!
    I want to accomplish and tackle the following, to make CALIFORNIA a place to live, not an area to crack jokes about:

    1) TAXES
    We have a spending problem. Period. Taxes are too many and too high. I propose dropping the State Tax rate down to 5-6%. I propose relooking at property taxes and ending the yearly2% increase we all suffer.I propose lowering the gas tax to .30 cents. I propose lowering fees as well. Vehicle fees, I want to drop those by 1/3. You shouldn’t have to go broke, paying for a vehicle registration fee that’s out of control. I will order the agency that collected fines/penalties issued during covid, returned to those impacted. They never should have been punished for TRYING to keep their livelihood during the Government rampage over covid restrictions. I will order all fines/penalties be returned to the school districts for NOT putting non-mandatory books on their shelves that School boards say should not be there. Additionally, I will look into Social Security payments, and why we as a State, tax those who are barely surviving on SSA incomes. Are we taxing SSA recipients? And if so, why? What can we do to help those who may be, one check away from homelessness? I will look into this and propose that we either lower the taxes on their payments, or completely stop these taxes!

    2) Crime
    If you Commit crimes, you will pay the price for it. I will immediately rescind the former GOV’s executive order banning State executions. We will relook at prisons, and their conditions. We will go after CRIMINALS, not citizens who are law abiding and only trying to defend not only themselves, but their families and business. We will work with the legislator to end the revolving door judicial system of justice we currently have, where victims of crime see their assailants go free after doing minimum time if any, for their crimes. If you believe CA is a haven for criminal activity, you are NOT welcome here.

    3) Homelessness
    We’ve poured into our homeless problem over 25+ BILLION dollars, with little to no results. If anything, we now have, nearly 30% of the Countries homeless population in California. They tried and failed consistently. We will ensure those that are homeless not due to their own fault (job loss, catastrophic event, etc ) will get the help they need/required, NOT lip service. We will end doing business with homeless groups if they have not shown results, tangible results, not fancy graphs or promises. If you’re getting over 300K for running a homeless program, we need to rethink doing business with that group. We need to HELP people who need HELP, not line the pockets of folks pretending to be helpful. If you’re an addict, you face some choices. If you’re caught with drugs, you’ll do time in a facility run akin to the CODAC group from Rhode Island. Same with alcohol. You will get the help you need, but we won’t wait any longer for getting you that help. Mental issues? We will look to building new facilities to handle mentally challenged individuals at the State level. I would like to see 4-6 facilities if possible. They WILL be heavily monitored for compliance, safety and results. We will bring services too these facilities in order to help those with mental conditions. Bottom line is: Help will be offered. Your choices are jail, assistance or to leave our State. You WILL, however, no longer be allowed to just lay about destroying the communities because you refuse assistance.

    4) Law Enforcement
    Where to start. We’ve all heard for years, that up to 10% of cops are bad apples. If that’s true, I don’t blame the officers, I blame management. 1-5 Bad cops is a cop problem; more than that, is a leadership problem. To any law enforcement officer (Police, Sheriffs, Prison Guards, etc) hear me very well: IF, you are part of the 10%, IF you are a ‘bad cop’, IF you are thinking you can BE a bad cop, you disregard your training/polices, local/state/federal laws and people’s rights? I will personally call for the MAX in punishment toward you, if you are convicted of any crimes.

    On the other side of that coin: IF, you follow your training/policies/procedures, local/state/federal Laws, citizens’ rights, then don’t worry about what the outside world says about you, I will be the FIRST to defend you against accusations of misconduct. On that you have my word.

    5) Veterans
    CALIFORNIA is unique in that we are the ONLY state left in the Union, which talks about VETs and how valuable they are, but still punishes them for serving. I’m talking about Taxing their retirement pay. I want to end that practice. I will work toward making CA vet friendly. We will move to not taxing Veterans Retirement pay in California. We will work towards moving Vets into our employment areas, starting with State jobs. I will work toward granting another 5 points toward hiring in State positions AND that vet’s be considered before any other applications. We will work towards getting our troubled vets off of the streets and moving them into housing/facilities as needed. No longer, will CA be a state that ” talks the talk but doesn’t walk the walk. ” We will work to ensuring if a Vet passes away, that their families are taking care of as well, by adjusting CA VET loan conditions, so the family doesn’t LOSE any benefits due to a Vet’s death.

    6) Education
    We should be educating our children to be able to read, write and accomplish basic math. What good is a book about anything/anyone, if the child can’t read it? Parents need to have a say in their children’s lives, NOT be cut out from them. Parents need to know what is happening to our children to keep them safe, to determine if they have issues or what have you. Parents are NOT the enemy nor are they criminals! As for colleges: State Universities should be affordable, to many not just a few. We will work with the Legislature to find ways to assist college bound students’ opportunities to acquire loans from the State. We will also be asking those State institutions to mitigate the astronomically high costs of Student tuition. As such, I will be seeking from State universities, that they unleash their financial power to assist students! I would like to see Universities donate 10% of their endowments towards access for students! By way of reduced tuitions or loans. I don’t want to hear, how CALIFORNIA is FIRST in LAST place for adult education/literacy. IT’S TIME! Time for Changes!!! Billions are just sitting there. It’s time to start reinvesting back into our communities and our students! I also want our Vets to have opportunities for school. Namely, their Military Occupation education. We ask our young men and women to handle countless things, situations and yet provide them nothing in educational experiences that their Military jobs required. I want to change that and start that change by granting College credits toward Military Occupations! In short, what you did in the Military, should be giving you college credits. Just like the University of Maryland does, I want to also do here in California.

    7) Lastly
    I want to make CALIFORNIA the place to be, but NOT for criminal intent, not because of the welfare system, not because of the drugs. Because it’s THE place to be and be proud of. We are NOT, Separate but equal. In the first week of my administration, we will end, Sanctuary status in this state. We will encourage Cities to do likewise. I will demand from our EDD director to recover up to 75% of the money THEY lost back to our State! We will remove the State travel bans on other States. We will replace our AG to one that is driven to work for the People of CALI, not the agenda of others. I want to see CALIFORNIA become the 3rd Largest economy in the world, NOT by taxing our people to death, but by the business it produces and the wealth it generates. I want to see Prosperity, not poverty. I want to see educated kids fulfill their dreams, not kids dreaming to be educated. I want people to be able to play in parks, not fear them. I want people to walk on the sidewalks with pride and purpose, not avoid them because of filth and encampments. I want to see people free their minds to pursue jobs in energy, computers, pharmaceuticals, manufacturing, finance or anything else they desire! I don’t want to see people hanging their head in shame, because their dreams have died due to the poison they put into their veins; because of the suffering from untreated mental illness, disease or poverty. I can only do so much, and I need your help to get there. Together, WE can make a difference in this State!

    WE can make this happen. WE CAN, make the changes needed. WE can, ” RAISE A LIL HELL “!! IT’S TIME!!!!!! Join me for a new California! Change is Coming!!!

    email: Leonaranjoiv@yahoo.com

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