It’s the fourth year in a row that the nation’s most populous state faces a multibillion-dollar budget deficit. This year's shortfall comes despite growing revenues fueled by stock market gains and investments in artificial intelligence.
Newsom's office outlined a behemoth $349 billion budget, though his proposal for how to spend all of that money is far from final. Last year Democrats, who hold supermajorities in both chambers, had to roll back their plans to provide free health care to illegal immigrants in the face of a $12 billion deficit.
The nonpartisan Legislative Analyst’s Office in November projected California to face a $18 billion shortfall next year. Their estimate and Newsom's sometimes differ.
Newsom's administration said some of the deficit was offset recently after the state racked in billion of dollars more in revenues than expected.
Still, State Controller Malia Cohen this week warned lawmakers that the state is already spending nearly $6 billion more than expected six months into the fiscal year. She urged them to take “a disciplined approach.”
Republican lawmakers said the problem is nothing new. They have little say in the budget process because Democrats are in complete control.
“California families have to balance their budgets and make tough choices. The state government should be held to the same standards,” Republican state Sen. Tony Strickland said.
California's budget problems could have an impact on his desire to run for president in 2028.
