California’s Deficit Deepens To $32 Billion (14-Year-High)… And That’s Before Reparations, by Tyler Durden

That’s what an increasingly narrow tax base and increasingly pervasive socialism will get you. From Tyler Durden at zerohedge.com:

California is now facing a $32 billion budget deficit, as the state faces a much deeper hole than previously projected, Bloomberg reports.

“We are walking into a budget where we need to maintain our prudence,” said Governor Gavin Newsom (D) on Friday, warning that a recession could worsen the financial situation in the years to come.

“That is an uncertainty that we must take very soberly and seriously as it relates to macro economic headwinds,” he added.

The expected shortfall is $9.5 billion worse than a $22.5 billion January estimate, according to figures released today, and will be the biggest deficit since 2010…

Newsom proposed a $224.1 billion general-fund budget for the fiscal year starting on the 1st of July, according to the report.

Revenue has been hurt by the sinking fortunes of California’s wealthiest residents, who shoulder a disproportionate share of the tax burden. Roughly half of the state’s personal income taxes coming from the top 1% of earners.

Thousands of workers have been laid off from California-based tech giants including Alphabet Inc., Meta Platforms Inc. and Twitter. The collapse of Silicon Valley Bank, which mainly catered to the tech and venture capital sectors, along with two other California-based regional lenders earlier this year adds to the economic turbulence. -Bloomberg

That said, the deficit is comparatively small vs. the cash crunch faced by the state during the last session, but this time Newsom will need to persuade Democrat lawmakers to make deep cuts – something which doesn’t come naturally to tax-and-spend liberals.

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