The state of California is now facing an eye-popping deficit of $68 billion dollars, according to a non-partisan analyst.
It has become so expensive to live in California that people are buying fewer homes and businesses are hiring fewer people. Add the massive population loss suffered by the state for the last two years and there is much less money on the table for the state to collect in taxes.
This is what the leadership of Gavin Newsom and progressive policies have brought to California. Wreck and ruin.
From the Associated Press, via KEYT News:
California faces record $68 billion budget deficit, nonpartisan legislative analyst says
California is facing a record $68 billion budget deficit, state officials announced Thursday, forcing hard choices for Democratic Gov. Gavin Newsom in his final term as he works to build his national profile.
The nation’s most populous state — with an economy that is the fifth largest in the world — has been struggling since last year because of the rising prices of most goods and services and how the U.S. government has been trying to control it.
It is now much more expensive for people and businesses to borrow money, meaning fewer people are buying homes and fewer businesses are hiring workers. That is leading to fewer tax collections for the state.
A series of damaging storms last winter have made the problem worse. The storms were so bad that state officials decided to give people and businesses more time to pay their taxes this year. Californians did not have to pay their 2022 taxes until November of this year. That meant Newsom and the Legislature had to come up with a budget over the summer without knowing how much money the state had to spend.
It turns out that they badly misjudged how much taxes people and businesses would pay. The nonpartisan Legislative Analyst Office said tax collections were off by $26 billion, a major driver of the deficit. When combined with the economic slowdown California has been facing since last year, it leads to a predicted deficit of $68 billion, Legislative Analyst Gabriel Petek announced Thursday.
No state wants to be on a trajectory that looks like this.
California Faces $68 Billion Deficit in 2024
Unemployment up, incomes down: State budget report gives grim outlook for Newsom’s Californiahttps://t.co/yVaABlEpQV
— Washington Free Beacon (@FreeBeacon) December 7, 2023
Head-spinning to see California go from a nearly $100 billion surplus to a $68 billion deficit in just two years https://t.co/IyRksGneEE
— Jeremy B. White (@JeremyBWhite) December 7, 2023
Turning this around won’t happen overnight and it won’t even begin until the state has new leadership.