California’s Projected Budget Deficit Grows By $15-billion
Sacramento, CA — The state of California’s non-partisan Legislative Analyst has released a new report detailing California’s widening budgeting deficit.
In January, the LAO estimated that the 2024-25 budget shortfall would be $58-billion. However, because of additional declining tax revenues, the new estimate is $73-billion, an increase of $15 billion.
The LAO adds, “If the budget problem increases by $15 billion, the Legislature will need to find a like amount of new budget solutions to ensure the budget is balanced for 2024‑25. Budget solutions include, for example: revenue increases and spending reductions (on both a one-time and ongoing basis), as well as other tools, like reserves and cost shifts.”
In January, Governor Gavin Newsom questioned the LAO’s figures (when the deficit was projected at $58-billion) and argued that tax revenues would come in better than anticipated, and the figure would actually be closer to $38-billion. Once state tax revenues are collected by mid-April, the governor will release a revised May Budget.
Republicans have been pushing for the governor to declare a fiscal emergency in the state and call for a special session to take immediate budget-reducing actions.
