California’s state budget is the largest in the nation, accounting for $306 billion in spending. Unfortunately, it severely underestimated costs and overestimated income, leaving the state with a $32 billion deficit, $10 billion larger than it forecasted just months ago.
According to Fox News, California is one of only a few states with any budget deficit at all. A progressive tax code that heavily taxes stock market returns may be partially to blame in a year with a subpar stock market performance. Inflation also surely pushed up costs.
Now, Gov. Gavin Newsom faces criticism from lawmakers of both parties. He has proposed $9.6 billion worth of cuts to climate programs, disappointing progressives, as well as cutting drought programs, frustrating rural conservatives.
This shortfall comes just a year after Newsom touted a $97 billion budget surplus, largely thanks to hoarding federal Covid-19 relief funds and redesignating them for other state programs.
While a $32 billion budget deficit should spark serious reflection over spending habits, community leaders and activists are forging ahead with calls for massive spending programs. Recently, California’s Reparations Task Force officially recommended the state pay reparations for Black residents that could amount to $800 billion, almost three times the size of the current state budget.
Unlike the federal government, states can’t print their own money to pay back debt, making state deficits extremely dangerous to the economy. California needs to get its fiscal house in order before it’s too late.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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