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When GAVIN NEWSOM governor two months ago offered $ 322 billion state budget For the fiscal year 2025-26 he predicts what is depicted as a “modest excess” out of $ 363 million.
Anyone who knows something about state budgeting knows that it is impossible to accurately determine such a tiny figure, which represents only one -tenth of 1% of the total budget. It could have been a number pulled out of the air to make the budget look balanced.
In fact, its own budget numbers have revealed that many billions of dollars will fall for the administration’s estimated revenue, except to cover their estimated expenses. The shortage will be covered by a number of loans for the outside and outside the budget, immersed in the emergency reserves of the state and accounting tricksSuch as pressing the state salary in June 2026 a month later in the fiscal year 2026-27, thus reducing the cost of 2025-26 by several billion dollars.
Everything in all, the excess of $ 363 million, quoted in January, is just a smaller version of the $ 97.5 billion surplus that Newsom boasted that it was in 2022, but it turned out to be a mirage due to extremely inaccurate revenue forecasts. The administration eventually admitted that the state would be Receiving $ 165 billion less than four years than he had guessed.
As the administration now recognizes the harsh reality that the state is facing multimillion-dollar gaps for an indefinite time- at least $ 10 billion a year – Between income and exit, thanks to a large extent to the storm of spending Newsom and the legislature covered by the excessive presumption of $ 97.5 billion.
One of these large costs is increasing – Expanding Medi-Cal Coverage All 1.6 million undocumented residents are already felt.
The expansion costs $ 2.8 billion more than the budget. Combined with other cost factors, Medi-Cal has a shortage of $ 3.4 billion to be loan -covered from other state funds.
Newsom and legislators, meanwhile, also approved costs $ 2.5 billion on the expenses associated with wild fires in Los Angeles – The money they hope to be restored by President Donald Trump without guarantee that they will be.
Although revenue has over 2024-25 expectations so far, this noise from numbers suggests that when Newsom revised its budget 2025-26 in May, this “modest surplus” will become a significant additional deficit deficit that he and the legislative power have set $ 11 billion in different so-called solutions.
Feeling the discovery, Republicans knock Newsom about the growing cost of providing Medi-Cal coverage of undocumented immigrants.
“Democrats and Governor choose priorities and prioritize the people who have entered our country illegally over the people who immigrate here legitimately, people who are citizens,” Senate Senate Republican leader Brian Jones He said.
Politically Zingers aside, this perennial saga shows that Newsom and its budget staff are not very competent when it comes to estimate both revenue and expenses. This phantom $ 97.5 billion exceeds from the assumption that the jump in revenue, as the country’s economy emerged from the Covid-19 pandemic, would be a constant increase of about $ 40 billion a year for the pandemic levels.
Read more: Budget Whiplash in California: From a record surplus to a huge shortage in a year
Why they made such a wrong assumption remains a mystery. The administration blames the instability of the state revenue system – more specially its Lopy For taxpayers with very high income-for the error.
This long-standing factor should make Newsom, etc., more cautious about long-term revenue forecasts, but instead they caught caution to the wind, rushing to boast that “no other country in American history has ever experienced an excess as big as this.”
This is a praise that will continue to hit the fiscal planning of California long after Newsom diverted someone else’s manager.
