California’s budget deficit has nearly tripled since last year, culminating in the largest revenue discrepancy the state has ever seen, according to a report from the state’s Legislative Analyst’s Office (LAO).
The state’s budget deficit ballooned to $68 billion this year after recording a deficit of $24 billion last year, owing to an unprecedented tax-revenue shortfall, according to the LAO report.
The deficit is the highest in dollar terms that the state has ever seen, but not as a percentage of overall spending, according to Politico.
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“The Governor has maintained strict fiscal responsibility since taking office, building up the state’s reserves to historic levels reaching the maximum allowed by the state constitution to be put in reserves and paying down debts — putting California in a strong position to deal with budget shortfalls,” Erin Mellon, communications director for the California Governor’s office, said in a statement to the Daily Caller News Foundation. “In January, the Governor will introduce a balanced budget proposal that addresses our challenges, protects vital services and public safety, and brings increased focus on how the state’s investments are being implemented, while ensuring accountability and judicious use of taxpayer money.”
The surging deficit comes after California Gov. Gavin Newsom touted the state’s $97.5 billion surplus in May 2022, which the governor vowed to spend on drought mitigation efforts, abortion initiatives and to address rising costs from inflation, according to NBC News.
Following the previous surplus, the state holds $24 billion in reserves that it could use to make up the difference, according to the LAO report. Around $26 billion of the deficit comes from the state receiving less revenue than previous projections.
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The deficit comes as the state continues to struggle with a homelessness crisis, with California spending a total of $30 billion on the issue since Newsom came to office in 2019. California is home to around 30% of the total homeless population in the U.S.
California is also hoping to continue construction on a costly high-speed rail project, which aims to connect Los Angeles with the Central Valley and San Francisco. The project has so far been allocated $9.8 billion but is estimated to need between $88 billion and $128 billion to be fully completed.
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