California: 'Severe revenue decline' – record $68 billion budget deficit

8:31 17.12.2023 •

The California State Capitol

California has lost billions due to reduced tax revenues, Fox News informs.

California is facing a major budget crisis due to a "severe revenue decline," and a record $68 billion budget deficit, likely forcing Democrats running the state to cut spending as the mass exodus of people and businesses moving to Republican-run states continues.

According to California's non-partisan Legislative Analyst's Office (LAO) report released Thursday, the state's budget deficit has grown exponentially in just a few months' time, up more than $54 billion from just $14.3 billion in June.

The deficit isn't the largest to ever face the state as a percentage of overall spending, but it is the largest in terms of real dollars.

The LAO's report made no mention of the billions in tax revenue lost by California due to the exodus of its people and businesses, but said the massive deficit increase and lower revenues were largely driven by a change to the state's tax filing deadline and poorer than expected economic conditions.

California saw its first-ever population decline in 2020 when the state imposed rigid lockdowns during the COVID-19 pandemic. From January 2020 to July 2022, the state lost well over half a million people, with the number of residents leaving surpassing those moving in by almost 700,000.

Erin Mellon, the communications director for Democrat California Gov. Gavin Newsom, told Fox News Digital that the governor "has maintained strict fiscal responsibility since taking office," including building the state's reserves to the maximum allowed under its constitution, and paying down debt.

"Federal delays in tax collection forced California to pass a budget based on projections instead of actual tax receipts. Now that we have a clearer picture of the state’s finances, we must now solve what would have been last year’s problem in this year’s budget," she said.


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