California's budget deficit is worse than what was thought: Report

 May 13, 2023

California's budget deficit has actually exceeded previous estimates. 

The Golden State's governor - Gavin Newsom (D) - made this revelation during a press conference that he held on Friday.

Newsom's office also published a press release on the matter, which can be found here.

The short story, though, is that California has a budget deficit of almost $32 billion, which, according to Fox News, is roughly $10 billion worse than expected - $10 billion worse than he said it would be back in January.

What's going on?

California has the largest budget of any state in the United States, standing at just over $300 billion. Just last year at this time, Newsom held a similar press conference where he celebrated a budget surplus of almost $100 billion.

Over the past year, California went from that $97 billion surplus to a $31.5 billion deficit. And, California is one of the only states in the United States, this year, to experience a shortfall.

So, the question is: "what is going on in California?"

There is no definite answer to the question. Fox, for example, reports, "Some say it is due in part to a progressive tax code that relies on wealthy taxpayers whose income is closely tied to the performance of the stock market."

Newsom and his people saw the deficit coming for some time now. And, back in January, Newsom announced measures to try to reduce the deficit. But, the fact that the deficit is now $10 billion more than it was expected to be shows that Newsom's efforts have failed.

What now?

Newsom and his team are trying to make it appear as though everything is under control.

During his press conference, for example, Newsome said, "we have a $31.5 billion challenge, which is well within the margin of expectation and well within our capacity to address."

In his new budget proposal, Newsom looks to address the budget deficit by cutting back on spending, by shifting expenses, by borrowing, and by dipping into the state's safety reserve.

"This was not an easy budget, but I hope you see we will try to do our best to hold the line and take care of the most vulnerable and most needy but still maintain prudence," Newsome said at the press conference.

Newsom's plan, however, is already receiving pushback from state Republicans. Republican James Gallagher, for example, put out a statement, saying:

[Newsom's] cuts to drought programs are dangerous, his ‘fiscal gimmicks’ are shortsighted and his words about good government and efficiency are yet another empty promise. Californians deserve better.

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