SACRAMENTO, Calif.
The State officials of California announced that California will likely have a $25 billion budget deficit next year. This comes amid high inflation and growing recession threat.
This ends the run of historic surpluses budget provided by Democratic-led Gov Gavin Newsom which let to free kindergarten for 4-year-olds and free health care for low-income immigrants. The previous projection was $97 billion surplus.
California State has $37.2 billion stored in its savings accounts and have cash available it meet its this year obligations. This place them in a position to face economic turmoil if any.
California Finance spokesman H.D. Palmer said “While we’re in fact better prepared, that doesn’t mean that the decisions to close the coming budget gap won’t be difficult particularly if the economic conditions that have slowed the economy continue, or get worse.”
According to Legislative Analyst’s Office (LAO), despite an estimated decline of more than $2 billion in required funding, the state could still fully fund schools by making few adjustments.
“It’s not insignificant, but it’s also manageable,” Legislative Analyst Gabriel Petek said of the deficit.
“As the ruling party continues to spend and grow government programs without accountability, I have repeatedly warned that California’s budget was on an unsustainable path,” said Assemblyman Vince Fong, who is the vice chairman of the Assembly Budget Committee. “Today’s report is another wake up call to those warnings. We must refocus on fiscal responsibility.”
Democratic Gov. Gavin Newsom’s administration has termed the $25 billion deficit estimate as “realistic and reasonable.”
