California is looking at a budget deficit of $68 billion this year. That’s the largest deficit in real dollars in California history and comes one year after the state’s record-setting $97.5 billion surplus.
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How is that possible? The state claims that lower revenues were largely driven by a change to the state’s tax filing deadline and poorer-than-expected economic conditions. Not mentioned was the billions in lost tax revenue from people who fled the state in the last few years.
California lost 407,000 people from July 2021 to July 2022, “including a greater share of those with a college degree and residents at all income levels than in the past,” according to the Stanford Institute for Economic Policy Research.
The non-partisan Legislative Analyst’s Office (LAO) says that the state’s budget deficit ballooned $54 billion from $14 billion in June.
As a remedy to the ballooning deficit, the LAO suggested the state dip into its $24 billion in cash reserves, as well as reduce spending on schools and community colleges. It also pointed to one-time spending cuts and shifting costs without impacting core services.
It added that the legislature should “exercise some caution” should it take such measures, and noted that the cash reserves would likely be insufficient to cover what it said were California’s multi-year $30 billion average deficits.
It went on to suggest a long term fix would be to either increase revenue, cut more spending, or both.
Most of that surplus cash came from Biden’s gifts to the states as a part of the COVID-19 payoff to blue state governors. A lot of that COVID money went to mending pension funds and giving out billions in free stuff.
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Now the money is gone, and Californians are left holding the bag.
Erin Mellon, the communications director for Democrat California Gov. Gavin Newsom, told Fox News Digital that the governor “has maintained strict fiscal responsibility since taking office,” including building the state’s reserves to the maximum allowed under its constitution, and paying down debt.
“Federal delays in tax collection forced California to pass a budget based on projections instead of actual tax receipts. Now that we have a clearer picture of the state’s finances, we must now solve what would have been last year’s problem in this year’s budget,” she said.
“Our economy is still good, but what we need to do is be incredibly cautious here,” Senate President Pro Tem Toni Atkins told Politico’s Playbook. “We are in a deficit, and therefore, new programs, new spending — in fact, existing spending — we’re going to have to slow down over time.”
That advice won’t sit well with California’s radical Democrats who don’t care about such mundane things as budget deficits. They will spend other people’s money as fast as humanly possible and let the taxpayers hang.