US EditionNewsom faces another multibillion-dollar budget shortfall in his last year as California governor
Governor Newsom’s $349 billion budget relies on AI-driven revenue gains but faces a $2.9 billion deficit and risks rising to $22 billion next year, officials said.
- At the State Capitol in Sacramento, Newsom presented his Jan. 9 budget proposal to close a $2.9 billion shortfall, outlining a $23 billion reserve plan.
- Federal changes wiped out roughly $1.3 billion as state spending runs nearly $6 billion over expectations this year, widening the budget shortfall for low-income Californians.
- Thanks largely to AI-driven gains, the budget counts on Silicon Valley AI boom pushing general fund revenues about $42 billion higher, allowing allocations such as $41.5 billion for health and $27,418 for per-pupil funding.
- The shortfall could force cuts and prevents Gov. Gavin Newsom from advancing new programs during his last year, while the California Legislature will negotiate priorities in the coming months.
- The Legislative Analyst's Office warned that next year’s shortfall could reach $18 billion, while Joe Stephenshaw said, `We don’t build in downturns into our forecast`, and analysts warn a 20% stock market correction could cut revenues by up to $30 billion.
80 Articles
80 Articles
California projects $3 billion deficit as outside forecasts show bigger shortfall
California Gov. Gavin Newsom’s office said Friday that the state is projecting a $2.9 billion budget deficit this year, far less than the $18 billion legislative budget analysts projected two months ago but still big enough to put the brakes on some ambitious new programs during his final year. Department of Finance officials unveiled the outgoing Democratic governor’s proposed $348 billion spending plan for the upcoming fiscal year, which star…
Pasadena Star News
What Southern California lawmakers think about Gov. Newsom’s proposed budget
California lawmakers wasted no time in offering their opinions about Gov. Gavin Newsom‘s proposed budget for the 2026-27 fiscal year, an overall spending plan of $348.9 billion, which the governor released on Friday, Jan. 9. The Newsom administration said the proposed budget limits new ongoing spending while continuing to invest in other areas, including universal transitional kindergarten, child care and health care. The budget calls for $23 bi…
The Mercury news
How Newsom aims to close California’s $2.9 billion budget shortfall
How Newsom aims to close California's $2.9 billion budget shortfall
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