California Projecting $54-Billion Budget Shortfall
Sacramento, CA — The impacts of COVID-19 on state government revenue are detailed in a new report released by the California Department of Finance.
It comes one week before Governor Gavin Newsom will release his May-revised budget. California is projecting a shortfall of $13.4-billion for the fiscal year that ends on June 30 and a $40.9-billion shortfall for the 2020-21 budget year that commences on July 1.
The overall $54.3-billion figure is equivalent to 37-percent of the current $146-billion fiscal year 2019-20 budget.
In the upcoming fiscal year, personal income tax is anticipated to fall by 25.5-percent, sales and use taxes by 27.2-percent and corporate taxes by 22.7-percent.
Based on the Proposition 98 constitutional calculation, the revenue decline will result in an $18.3-billion drop in General Fund money for k-12 education and community colleges.
The report also notes that 4.2-million Californians have filed for unemployment since mid-March.
More specifics about the proposed impacts to services will be detailed in the Governor’s revised budget next week.