Fueled by high inflation and the threat of a recession, the state faces a potential $25 billion budget shortfall next year that could, at a minimum, curb some recent spending increases for essential safety net programs. that helps Californians most in need.
The State Legislative Analyst’s Office, which advises lawmakers on California’s fiscal outlook, delivered the sobering news, which comes after a historic budget surplus provided Gov. Gavin Newsom and the Democratic-led Legislature with a abundance of wealth to expand government assistance.
The previous projection — a $97 billion surplus — led to expanded Medi-Cal eligibility to all immigrants in 2024, paid family leave, free preschool for 4-year-olds and an increased credit tax on earned income.
Newsom and lawmakers also approved a $17 billion relief package in June to help families, seniors, low-income Californians and small businesses, including $9.5 billion in stimulus payments to struggling Californians. against high gasoline prices and rising inflation.
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