We would be lucky if our deficit is only $10 billion. The real deficit, without the manipulations, stealing from the reserves and bonds will be closer to $80 billion.
“This year, the budget process could drag on even longer, as Congress might not enact a federal spending plan until the fall. That means lawmakers may need to take the extraordinary step of returning to Sacramento after the conclusion of the regular legislative session to adjust the budget to account for federal cuts.
With pricey social safety net programs like Medi-Cal and local homelessness grants on the line, those talks are sure to be contentious.
California may need to shoulder even more of a burden for those programs if congressional GOP leaders get their way. Leadership wants to push costs for Medicaid and the federal food stamp program onto states, although their Republican colleagues aren’t exactly sold on the idea.
When Newsom publicly addresses all these issues next week, it will be the first time this year he delivers a formal presentation on his proposed spending plan for the state.
Ending payments to illegal aliens will go a long way to save the problem. The cost of Medi-Cal to the State for illegal aliens is just under $10 billion. Add top that the cost of crimes, housing, education and other freebies—you have the deficit based on illegal aliens. This is a Newsom murder of California.
California lawmakers are bracing for a $10 billion-plus budget hole — without federal cuts
Gov. Gavin Newsom and legislative leaders are now flying blind into budget crunch time, as tariffs and a lack of tax receipts are stoking financial uncertainty.
By Eric He, Rachel Bluth and Lindsey Holden, Politico, 5/7/25 https://www.politico.com/news/2025/05/07/california-10-billion-budget-deficit-federal-cuts-00334176
SACRAMENTO, California — Gov. Gavin Newsom is likely staring down a $10 billion budget hole that could deepen to $20 billion or more.
President Donald Trump’s tariff policies, a Medi-Cal shortfall and delayed tax filings from Los Angeles-area wildfire victims are putting the state in a worse economic situation than the California governor previously anticipated — and that’s without taking into account expected federal spending cuts.
Ten people briefed on the matter said state lawmakers are being told to brace for a shortfall of at least $10 billion when Newsom presents his revised budget next week.
In early January, the governor’s Department of Finance projected the state would see a small surplus this year. But Newsom and legislative leaders are now flying blind into budget crunch time, as tariffs and a lack of tax receipts — including those from some of the wealthiest Californians — are stoking financial uncertainty.
“We’re going to be trying to pass a shell of a budget,” said one lawmaker, referring to the deficit projections. “They’re just fake numbers, because we just don’t know.”
Although income tax receipts have been $4 billion over projections so far, tariff-driven high prices and other Trump financial moves will likely stymie that growth.
Newsom acknowledged this reality during a news conference last month, when he noted his revised budget “will reflect a downgrade in economic outlook in this state,” with a GDP dip and increased unemployment and inflation.
“All of those things will [lead to] slower economic growth, less capital gains revenue, and a significant … change in our projections as it relates to revenue collection and an adjustment to our baseline spending,” he said.
Assemblymember Marc Berman, a Bay Area Democrat, said a deficit running in the tens of billions of dollars would not surprise him.
“We were doing really well a couple months ago, and then Donald Trump and Elon Musk took a chainsaw to our economy,” Berman said. “It’s clear as day.”
After the governor delivers his budget next week, he will start negotiating with Assembly Speaker Robert Rivas and Senate President Pro Tem Mike McGuire over a spending plan they’ll finalize by the end of June and then adjust through trailer bills.
This year, the budget process could drag on even longer, as Congress might not enact a federal spending plan until the fall. That means lawmakers may need to take the extraordinary step of returning to Sacramento after the conclusion of the regular legislative session to adjust the budget to account for federal cuts.
With pricey social safety net programs like Medi-Cal and local homelessness grants on the line, those talks are sure to be contentious.
California may need to shoulder even more of a burden for those programs if congressional GOP leaders get their way. Leadership wants to push costs for Medicaid and the federal food stamp program onto states, although their Republican colleagues aren’t exactly sold on the idea.
When Newsom publicly addresses all these issues next week, it will be the first time this year he delivers a formal presentation on his proposed spending plan for the state.
The governor skipped his usual January budget announcement due to the wildfires, leaving Department of Finance Director Joe Stephenshaw to contend with reporters’ questions. Next week, he likely won’t be so lucky.
