After years of record-breaking surplus, California is now facing a $25 billion shortfall next fiscal year thanks to dwindling tax revenue, according to a state report.
“Reflecting the threat of a recession, our revenue estimates represent the weakest performance the state has experienced since the Great Recession,” the Legislative Analyst’s Office wrote in a report released Wednesday. “The budget problem is mainly attributable to lower revenue estimates, which are lower than budget act projections from 2021‑22 through 2023‑24 by $41 billion.”For years Gov.
California was the state with the biggest exodus in the nation, causing it to lose a House seat for the first time in history. Now analysts are seeing the results of all these households and businesses that aren’t paying taxes — the biggest black eye being Tesla and Hewlett Packard, both setting up shop in Texas.
State Senate Leader Toni Atkins said California Democrats have been responsible budgeting a priority over the past decade to “strengthen the middle class, assist struggling Californians, and fight climate change.”“Thanks to our responsible approach, we are confident that we can protect our progress and craft a state budget without ongoing cuts to schools and other core programs or taxing middle-class families,” she said.
In addition, the analysts did not create their forecast taking into account a full-blown recession. If this occurs, the deficit could double — jumping between $30 billion to $50 billion.
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