"Four years ago, as the state's economy rebounded from a pandemic-caused downturn, the state's revenues saw a brief upward spike. Someone in the administration, perhaps Newsom himself, decided that the revenue jump would be permanent and that it meant a $97.5 billion surplus over several years. No other state in American history has ever experienced a surplus as large as this, Newsom bragged as he unveiled a 2022-23 fiscal year budget that topped $300 billion."
"But the revenues never reached the assumed level and his Department of Finance eventually and very quietly acknowledged that the administration had overstated income by a whopping $165 billion over four years. The additional spending, which outpaced real revenues, created what was dubbed a structural deficit in the annual $20 billion range ever since, covered with an array of accounting gimmicks, spending deferrals and raids on special funds and emergency reserves."
California projects an additional $42.3 billion in tax revenue over the next three years, which would largely offset a persistent budget shortfall. A temporary post-pandemic revenue spike was previously treated as permanent, producing a $97.5 billion assumed surplus and prompting roughly $14 billion in added spending. The Department of Finance later acknowledged income was overstated by about $165 billion over four years. That overspending produced an ongoing structural deficit near $20 billion annually, financed with accounting maneuvers, spending deferrals, and raids on special funds and reserves. Recent projections had shown deficits rising into the tens of billions in coming years.
Read at www.mercurynews.com
Unable to calculate read time
Collection
[
|
...
]