California Sees $68 Billion Deficit on Revenue Plunge
- Budget adviser released its fiscal outlook report on Thursday
- California deficit fueled by slowdown of income tax revenue
In January, Governor Gavin Newsom, a Democrat, will present his budget for the upcoming fiscal year that begins in July 2024.
Photographer: Patrick T. Fallon/AFP/Getty ImagesCalifornia is likely to face a $68 billion deficit in its next fiscal year as income tax revenue plummets, marking the second consecutive year of shortfalls that could lead to cuts to key safety-net programs, according to the state’s budget adviser.
The projected deficit, which is double the size of last year’s shortfall and the largest in the state’s history, comes after an “unprecedented” downward revision to estimated tax receipts, the state’s Legislative Analyst’s Office said in a report released Thursday. The LAO, as the agency is commonly known, said tax receipts last year fell $26 billion short of earlier estimates and forecast a cumulative $155 billion deficit through 2028.