According to a new assessment from the independent Legislative Analyst’s Office (LAO) of the state, California’s budget situation is expected to worsen and may perhaps reach a record deficit of $73 billion.
The dire predictions were presented by the LAO in a report released on Tuesday, which warns that a $24 billion “erosion in revenues” translates into a $15 billion rise in the state’s budget deficit. As a result, the budget deficit—which was projected to be $58 billion last month—may now reach $73 billion.
“The actual increase in the state’s budget problem will depend on a number of factors, including formula-driven spending changes, most notably Proposition 98 spending requirements for schools and community colleges,” the paper stated.
In response to the latest LAO report, H.D. Palmer, the deputy director of the California Department of Finance and Newom’s spokesperson on fiscal issues, told Fox News Digital that their budget gap is not the $38 million they predict.
“From now through April, more than $51 billion in income and corporate tax receipts are forecast to come in,” Palmer stated. “No one can say today with certainty how those numbers may change the budget estimate of a $38 billion shortfall.”
“A responsible step would be for the Legislature to act now on the early action budget measures needed for $8 billion in solutions to help close this gap,” he stated.
