Governor Gavin Newsom is wrong. His proposed budget is not “resilient;” it demonstrates an inability to learn the lessons from California’s volatile budget history.
The crippling deficit is merely one manifestation of the broader crisis. Newsom estimates a $37.9 billion deficit, about one-half of the nonpartisan Legislative Analyst Office’s (LAO) initial $68 billion calculation. In response, the Analyst says Newsom’s revenue estimate is “about $15 billion higher than ours . . . fall(ing) on the optimistic side of what we consider most plausible.”
Even if the governor’s estimate proves correct, California is once again facing a fiscal crisis that will likely last for several budget cycles. This prolonged fiscal crunch is not due to revenues simply returning to “normal.” It is a spending problem that requires fiscally sound solutions, not proposals that kick the can down the road in the hope that robust revenue growth will somehow return.