Posted on 05/07/2020 9:32:38 PM PDT by fluorescence
California finance officials just revealed a $54.3 billion deficit in the first economic assessment of the coronavirus pandemic's devastating blow to the fifth-largest economy in the world.
That figure is higher than the deficit during the Great Recession and obliterates the state's once-healthy reserves.
Without sugar-coating how hard the prolonged shutdown of businesses and job losses will hit the state, Gov. Gavin Newsom's administration released bleak projections on key statewide indicators: 18% unemployment rate for the year, 21% drop in new housing permits and nearly 9% decline in California personal income.
All this signals a financial tsunami and cuts to schools, health care and safety-net programs, as state and local governments turn to the federal government for additional stimulus support. In one example, California's public school system, including K-12 and community colleges, will lose roughly $18 billion, setting back years of striving to reach adequate education funding.
During his daily press briefing Wednesday, the governor signaled that the budget figures would be "jaw-dropping" and sought to brace the public for a prolonged recovery. Newsom said Wednesday that the budget can't be balanced without significant help from Washington, D.C.
Newsom also announced tax reprieves for homeowners and businesses if they suffered financial hardship from the pandemic.
The governor's budget update projects California's economic losses will fall disproportionately hard on low- and middle-income Californians, which will only exacerbate income inequality. At the same time, low-income households and people of color are at greater risk of contracting and dying from the virus as the number of confirmed cases reaches 60,000.
Since mid-March, Californians have filed more than 4.2 million unemployment claims.
"This is particularly concerning because the average income did not return to pre-Great Recession levels until 2018," wrote the Department of Finance in its fiscal update today.
It's an about-face for a state that began the year with ambitions of expanding child care for working parents and health care for undocumented seniors.
Compared to the expansive budget Newsom released in January, this one has shrunk to reflect decreases in the general fund's main revenue sources: a 25% drop in personal income taxes, 27% drop in sales taxes and 23% drop in corporate taxes.
The $54.3 billion deficit is driven by three factors: approximately $41 billion in revenue loss, $7 billion increase in health and human services programs (mainly the state's Medi-Cal health program for the poor) and about $6 billion in additional spending, mainly driven by the state's response to COVID-19. The Newsom administration's response has come under scrutiny as lawmakers demand oversight of multi-million dollar contracts and federal investigators look into supply deals gone awry.
A full budget revision will be released May 14.
Illegals and choo-choos to nowhere - they made their choice.
What cuts......
Wow, so they will have to cut government? There’s another name for that: freedom.
Exactly. The word in the liberal vocabulary that comes closest to “cuts” is “taxes”.
cuts...oh sure....
LOL!
Always tugging at the heart strings, education etc. Education? Like how a quarter of their costs is feeding kids food? What has that got to do with education? What about all the bond issues passed to take care of education, but the money was diverted to higher admin salaries?
California must cut departments and cut staff. Period. It's a bloated state government full of waste. Every state department.
Lay off 1/3 of the government workers and cut pensions by 1/3. !Arrest and immediately deport ALL illegal alien invaders . Stop the leftist BS. Otherwise . ..whinge a sh””?
It has to get worse before it gets better.
As a percentage I think the Illinois numbers will be at least as bad.
L
Stop the tyrannical madness bastard adulterous Gavin thresome gruesome Newson. Set our people free. Everyone will be suing your pathetic ass you retromingent bastard.
Here comes more punitive taxes CA...Better get rid of prop 13...They’ve been gunning for that for years.
Winsome Newsome screwed the pooch.
And nothing about cutting back on welfare and freebies given to illegal aliens, or getting out of the way of deportations.
The way commercial real estate is heading...getting rid of Prop 13 might actually lower property taxes for some as the new reassessed value might be a lot lower than the current value.
Lay off 1/3 of the government workers and cut pensions by 1/3. !Arrest and immediately deport ALL illegal alien invaders . Stop the leftist BS.
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Hey! What the hell are you trying to do....balance the California state budget?
Gee, just how much can the California Taxpayer shoulder for your moral superiority and social justice warrior jihad?
Quadruple taxes on your citizens? Declare bankruptcy? Wall yourself off and create Mexifornia?
Socialism is Legal Plunder - Bastiat
https://usdebtclock.org/state-debt-clocks/state-of-california-debt-clock.html
You’ve been DESTROYED intentionally...not unlike the rest of the republic. Navin Gruesome is a sick...er slick dude. He can figure it out. Welcome to the Hotel Mexifornia. Sanctuary socialism. You’re living in THEIR PARADISE, and YOU ARE NOT the GANGSTERS.
https://www.youtube.com/watch?v=fcsvE1zv1ek
Kiss THEIR rings. Grovel at their feet or lock arms, ammo and ideas with brothers and sisters in the cities, suburbs and countryside.
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