Where Did The “Surplus” Go??? California Faces $25 Billion Budget Deficit Despite Recent Surplus

(Sacramento, CA) — A new report from the California Legislative Analyst Office is warning the state faces a 25-billion dollar budget deficit next year. State Legislative analysts say the primary reason is a slow in income tax collection. Just six months ago, California Governor Gavin Newsom announced a historic 97-billion dollar surplus for the state. With the threat of a recession, revenue estimates represent the weakest performance California has experienced since the Great Recession. The LAO also estimates California could see deficits between eight-billion dollars to 17 billion over the following four years. The estimate is part of the LAO’s 2023-2024 fiscal outlook, which is typically released at this time of year to help guide state lawmakers as they begin putting together budget proposals for the upcoming fiscal year. The office noted less spending will help offset revenue losses like the state is expected to experience.