The tension of the shaken budget in California continues to grow

From And WaltersCalmness

This comment was originally published by CalmattersS Register about their ballots.

In a month, the GAVIN NEWSOM governor must reveal a revised version of $ 322.3 billion budget For the fiscal year 2025-26 he offered in January,

It is not likely that it is a nice picture.

Thehe Budget He is now billions of dollars in the hole, thanks to the erectioning costs of destructive and deadly fires that have diverged through Los Angeles County, when Newsom revealed its budget in January and a huge increase in the cost of medical help for the poor.

Moreover, the heavy tariffs of President Donald Trump for imported goods and tariffs for revenge for US exports are already depressing values ​​of shares, which can reduce taxes on income from the richest residents of California, The The most important source of government revenueS If continued, tariffs are likely to have a negative impact on the common economy, which would also adversely affect corporate and individual income taxes.

Read more: Trump’s tariffs can harm California’s budget

California’s economy has not completely recovered from the effects of the pandemic. He has more than a million unemployed workers and his unemployment, 5.4% of the workforceis tied to Michigan as the second highest among the United States.

If nothing else, the picture of employment in California is even darker than raw numbers point to.

Thehe Center for Jobs and EconomyCalifornia Business Group Hand notes an analysis of the latest employment data that “job growth remains concentrated in government and government, supporting healthcare and social services, while other private industries continue to offer jobs. Create for the purchase of jobs, not to maintain competitive policies that allow the private sector to create them. “

As if these winds are not discouraging enough when Newsom He declares that the 2024-25 budget is “balanced”. The details revealed that he counts direct and indirect loans, accounting tricks and deviations from emergency reserves as revenue.

Thus, since the main economic and fiscal tendencies threaten to deepen the budget hole of the state, its reserves will be less capable of offsetting the deficit.

The unexpected increase in the cost of Medi-Cal, the California Health Program for 15 million low-income residents, is the most striking of the eyes of many negative factors. Last year, when the budget already expires red ink, Newsom and the legislature expanded the benefits of Medi-Cal for practically no longer covered.

NEWSOM characterizes it as fulfilling its 2018 campaign promise for universal healthcare, although The precision bet was to create a single payment system Like those in Western Europe and Canada.

The extended coverage, most of all, in favor of undocumented immigrants, had to cost about $ 6 billion. However, since the first year, the administration has requested a $ 3.4 million loan and additional budget loans for $ 2.8 million to cover the cost of the program.

In other words, the price has a large extent doubled in just a few monthsEmployees said because they underestimated how many people would be enrolled.

Unfortunately, this continues the trend of Capitol’s politicians to introduce a new program without fully understanding its parameters and costs.

The explosion in the Medi-Cal costs this year, of course, will transfer to the next budget. It also adds to what the budget MAVENS calls a “structural deficit”, which means that the costs already recorded in the law are ahead of reasonable revenue forecasts.

The Newsom Ministry of Finance and the Budget Analyzer of Legislative Power Gabe Peak agree that the structural deficit, at least $ 10 billion a year and as much as $ 30 billion, will continue at least the rest of the Newsom Government.

Recent developments of both revenue and budget expenses show that it is likely to be in the upper levels of the range, one of the legacy of Newsom’s time as a position.

This article was Originally Published on CalMatters and was reissued under Creative Commons Attribution-Noncommercial-Noderivatives License.