The state of California is predicting a $24 billion budget deficit despite the U.S.’ efforts of avoiding recession. However, regardless of the deficit, California will continue spending on social programs, says LAist.
According to the Legislative Analyst’s Office’s yearly forecast, the state of California will be facing a $24 billion budget deficit in the 2023 fiscal year. This prediction is despite U.S.’s efforts to avoid a recession. However, regardless of the budget deficit, lawmakers said they will continue spending on social programs for the state. Last June, California Governor Gavin Newsom signed a $308 billion budget. Newsom also proposed a budget in January and a revision of it last May. The budget, which the lawmakers must have approved, is intended to fund California since July.
California’s Department of Finance spokesperson H.D. Palmer refused to comment on whether spending on social programs must be reduced. However, according to him, Newsom’s priority is not to cut down the budget on the programs that Californians rely on or even launch new ones. The state government aims to avoid the scaling down of programs that also happened during the Great Recession. It took several years for California to recuperate from this incident.
Cause of the Predicted Budget Deficit
According to LAist, the legislative analysts associate the predicted budget deficit with residents whose incomes depend on investments, real estate, and the price of stocks. According to them, if California goes through a recession, the budget deficit may be even worse. Revenues are predicted to decline by $30 billion to $50 billion.