Newsom's Spending Binge Outstripped Revenues, Creating Chronic Deficit

"These deficits are concerning for three reasons. First, after four years of projected deficits and a cumulative total of $125 billion in budget problems solved so far, the state's negative fiscal situation is now chronic. Second, structural deficits have grown - our November outlook is the most negative forecast of the budget's position since the pandemic."

"Finally, deficits have persisted even as the state's economy and revenues have grown, underscoring that the problem is structural rather than cyclical. Taken together, these trends raise serious concerns about the state's fiscal sustainability."

Historic budget charts show fifty years of California revenues and spending. During Governor Gavin Newsom's seven signed budgets and the proposed eighth, spending rose sharply while population growth and inflation remained comparatively muted. Revenues increased roughly 60%, largely due to a 48% gain in personal income, but enacted spending outpaced those gains. The Department of Finance and the Legislative Analyst Office project multiyear deficits of about $20 billion to $35 billion annually. Deficits have persisted despite economic and revenue growth, indicating a structural shortfall that threatens the state's fiscal sustainability.

Read at San Jose Inside