Posted on 12/08/2023 8:14:58 AM PST by george76
California's budget deficit is expected to soar to $68 billion as income tax revenues fall behind with a slow-growing economy.
The latest calculated figures from the state’s nonpartisan Legislative Analyst’s Office predict California “will face a serious deficit” of $68 billion, a massive increase from the $14 billion predicted in June. The LAO suggested a number of possible cuts state lawmakers could look into to lower the estimates.
“While addressing a deficit of this scope will be challenging, the Legislature has a number of options available to do so,” according to the LAO website.
The state could look into $24 billion in reserves and possibly reduce funding for schools and community colleges, saving $17 billion, according to the LAO. Reducing “one‑time spending” could also give the state “at least an additional $10 billion.”
However, the LAO predicted the state’s reserves likely are not sufficient to cover the state’s deficits over the years, which will average $30 billion per year under the office’s estimate.
“These deficits likely necessitate ongoing spending reductions, revenue increases, or both," according to the LAO. "As a result, preserving a substantial portion—potentially up to half—of reserves would provide a helpful cushion in light of the anticipated shortfalls that lie ahead."
Under Proposition 98, which requires a minimum funding guarantee for public education, an automatic reduction is about $4 billion, but the state could reduce the general fund by $21 billion if lawmakers approved.
“These options and some others, like cost shifts, would allow the Legislature to solve most of the deficit largely without impacting the state’s core ongoing service level,” according to the LAO.
In June, Gov. Gavin Newsom (D-CA) signed the $310 billion 2023-24 state budget, covering a $30 billion-plus deficit. Newsom is set to release his proposed 2024-25 budget in January, followed by a revision in May. The legislature and the governor will need to take into account the state's multi-billion dollar budget deficit before the former approves the budget for the fiscal year, which begins July 1.
No sweat...just raise taxes. Easy solution.
What do you want to bet that someday a liberal Democrat will declare that “they have no choice” but to turn to our enemies (Chinese communists, or Muslim oil state, etc.) for a bail-out?
What happened to the surplus?
I know that just because there is a surplus, it didn’t necessarily mean there is that much money in the bank. But, werent there a few billion left over, ti
O help offset future deficits? 68 billion is a huge deficit.
It goes without saying perhaps, but, Democrats are completely in charge in Sacramento. There is no way they can blame any of these problems on Republicans.
Meanwhile, here in Florida, next year’s budget is $4b less than last year with over $16b in reserve. And with no income tax.
The surplus was a ruse. Covid money propped up California.
Didn’t you get the memo - It’s Trump’s fault!
4. Homeless realize their financial well-being can be enhanced by creating their own messes to clean up.
Have no fear!! I’m sure they’ll invent new words.
Ah yes dem dpending for decades. And wimpy republicans going along with it
Put Commiecrats in charge and this is the price you pay.
Couldn’t have happened to a nicer state.
The Legislative Analyst’s Office seems to have a lot of theoretical solutions. From what I see not one of them mentions cutting the 30 billion a year in welfare programs which is up from 23 billion from the previous years budget.
But where will all the illegals go for edjoomacation?
Only Japan and China have bigger budgets than California. Even France and Germany have smaller budgets.
“Doesn’t matter. The feds will bail them out. The lunatics in CA can continue on with their wokeness.”
Correct 100%. We already know who gets the bill.
And women will elect grusome newsome our next president because he has the nicest hair
Texas has a $32.7 billion surplus.
They will blame Reagan.
The devil (Biden) will bail them out with our money
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