After years of severe revenue swings, governor acknowledges larger deficit and submits a revised budget with real cuts.
a 2024-25 state budget in January, he declared that the state faced a $38 billion deficit and chided journalists for citing wider projections in the gap between income and outgo from the Legislature’s budget analyst., covering the current fiscal year, the 2024-25 year and 2025-26, and tabbed the deficit at $44.9 billion through 2024-25. He estimated an additional $28.4 billion in 2025-26, totaling $73.3 billion., for the wide fluctuations in revenue estimates and reality.
Likewise, the valleys have deepened, with this year’s massive deficit a prime example — and the revenue cycles bear only passing relationship to the overall economy. Gov. Arnold Schwarzenegger and the Legislature appointed a blue-ribbon commission to study revenue volatility and recommend systemic changes. The commission was sharply divided but Having acknowledged the much larger deficit, Newsom proposes two changes in the budgetary process to cope with the volatility factor: including future budgets in the annual calculations and not spending erratic revenue sources, such as capital gains, until they are realized.
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