Governor Gavin Newsom's proposed $322 billion state budget for fiscal year 2025-26 includes a seemingly modest surplus of $363 million. However, experts believe this figure is misleading, as it represents only a fraction of the overall budget and conceals multibillion-dollar revenue shortfalls. The administration is resorting to loans and accounting maneuvers to cover these gaps, similarly to the previously claimed but nonexistent $97.5 billion surplus. With continuing overspending particularly in areas like Medi-Cal, California is projected to face annual budget deficits of at least $10 billion for years to come.
The budget projected a modest surplus of $363 million, misleadingly contrived amid deeper multibillion-dollar shortfalls due to inaccurate revenue projections and excessive spending commitments.
Governor Newsom's administration is confronting a harsh reality, revealing a multibillion-dollar gap of at least $10 billion annually, a consequence of overspending based on prior surplus assumptions.
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