California is in for budget deficits for the next few years. That’s according to a report recently released by the state legislature’s research arm.
Governor Gavin Newsom’s administration reported a $12 billion deficit followed by more in the years to come in his new budget proposal this month. The Legislative Analyst’s Office — or LAO’s — new report says that might be the norm for the next few years.
Analyst Ann Hollingshead says, "We're seeing a similar size of budget deficits for the upcoming year and future years."
Deficits between now and the end of the decade range from $10 billion to $20 billion. The report says that’s because state spending is growing, but its revenue isn’t keeping up.
The legislature must pass a budget by mid-June, and the LAO says it should make adjustments similar in size to what Newsom proposed. But it doesn’t have to do them in the same way.
Newsom’s budget — for example — makes big cuts to Medi-Cal because it’s one of the programs California spends the most money on. Lawmakers could choose to make cuts elsewhere. It could also add revenue — for example, increase taxes.
Hollingshead also says the LAO can’t make specific recommendations about how the state reacts to possible federal cuts until they’re finalized.
"That's not something that the legislature can act on immediately, but something that we encourage policy makers to keep in mind as they're crafting the final budget package," she says.
A budget bill that would make large cuts to Medicaid — which feeds into Medi-Cal — is currently working its way through the U.S. Congress.