Governor Gavin Newsom's Office has indicated that President Trump's tariff policies will lead to a projected revenue drop of $16 billion for California by June 2026. This comes despite current tax receipts being significantly higher than expected. Newsom's team has coined the term 'Trump Slump' to describe the economic downturn attributed to these tariffs. The new revenue shortfall will necessitate further budget cuts, compounding existing fiscal challenges that have already led to reduced spending for three consecutive years as state expenses continue to outpace revenues.
Gov. Gavin Newsom's Office projected that President Trump's tariff policies will result in a $16 billion revenue reduction in California through 2026, impacting state finances.
Despite an early surge in personal and corporate tax receipts, the 'Trump Slump' will lead to lower overall revenues in California, highlighting Trump's economic impact.
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