Leaders are fashioning a ‘balanced’ budget that could only make the state’s fiscal predicament worse in future years.
Gov. Gavin Newsom and his fellow Democrats in the Legislature spent their way into a massive state budget deficit by assuming that a one-time surge in revenues would become a permanent cornucopia of money to expand medical and social services., the gap between income and outgo could no longer be ignored. In January, Newsom pegged the deficit at $38 billion as he proposed a
“The state faces significant operating deficits in the coming years, which are the result of lower revenue estimates, as well as increased cost pressures,” Petek said in“These deficits are somewhat compounded by the governor’s budget proposals to delay spending to future years and add billions in new discretionary proposals.
Newsom termed it “a balanced approach that will take a significant chunk out of the projected shortfall.” Were California experiencing only as temporary gap due to recession, a case could be made for a jerry-rigged budget to minimize impacts on those who depend on money flowing from Sacramento. However, the state faces what budget mavens call a “structural deficit,” meaning there is a fundamental imbalance disconnected from the state’s overall economy.that the state was enjoying a $97.5 billion surplus, thanks largely to a $54.8 billion projected uptick in revenues.
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