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ack in May, California Gov. Gavin Newsom gleefully boasted that the state of California had a nearly $98 billion surplus after operating in the black for multiple years. But, now that Newsom’s been safely reelected, new projections show that the state of California will have a $25 billion deficit in the 2023-2024 fiscal year.
“That shortfall, according to a new report from the state’s independent Legislative Analyst’s Office, could be followed by continued annual budgetary gaps between $17 billion and $8 billion for the subsequent three years,” reports the Sacramento Bee. “If the forecast holds true through June, when the state’s next budget must be passed, Newsom and legislators may have to make some tough calls. Those include how far to dip into the state’s reserves, where to make potential spending cuts and what projects and programs to slow down. Luckily, the state has stashed away billions of dollars in reserves in recent years to help cope with it.”
“The downturn is due to state revenues growing slower than spending — a possible precursor to a recession, the report indicated. The revenue estimates, if accurate, would represent the weakest economic performance California has experienced since the Great Recession of 2007 to 2009.”