From Washington Examiner: California Gov. Gavin Newsom’s office said Friday that the state is projecting a $2.9 billion budget deficit this year, far less than the $18 billion legislative budget analysts projected two months ago but still big enough to put the brakes on some ambitious new programs during his final year.
Department of Finance officials unveiled the outgoing Democratic governor’s proposed $348 billion spending plan for the upcoming fiscal year, which starts July 1, 2026. His proposed budget includes $248 billion in general fund spending, about $11 billion more than the current year. His office cited a revenue rebound, elevated stock prices, and a more favorable outlook.
Every state budget is built on forecasts of economic conditions, both at the federal and state levels, that affect tax revenues. California relies heavily on income tax from the top 1% of its residents, whose money is often tied to the stock market, which has been on a wild ride since Trump’s second term began. As a result, California is left in a vulnerable position, and last year’s market swings led analysts to predict a multibillion-dollar deficit.
Republicans slammed Newsom, who they say has his sights set on his political future and not on California.
“This is more of the same from a lame-duck governor content on leaving the rest of us to pick up the financial pieces when he leaves office,” California state Sen. Minority Leader Brian Jones said in a statement.
“I was shocked by what I found in the annual state budget,” Jones said. “A bloated and reckless spending plan stuffed with pork, misguided priorities, and overspending on feel-good social programs at a time when a strong cinching of the belt was in order to preserve essential services.
“That was 2010, and Democrats spent what I called an ‘absurd” $129 billion that year,” he said. “Fast forward, and California’s budget has exploded to an unprecedented $321 billion despite repeated warnings from experts that the money is running — and has now run — dry. And what have we gotten for this prodigious spending? Are we better off today than we were then?”
Read more at Washington Examiner
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