California Gov. Gavin Newsom will face an estimated $20 billion shortfall in the state's budget by 2026, the Washington Examiner reported. Meanwhile, Newsom has pledged to fight provisions of President-elect Donald Trump's new administration which will cost taxpayers millions of dollars.
A report from the California Legislative Analyst’s Office warned that measures must be taken in the coming years. "We anticipate the Legislature likely will need to address deficits in the future, for example by reducing spending or increasing taxes," the report said.
"In our view, this year’s budget does not have capacity for new commitments, ongoing ones." Gabriel Petek, an analyst for the agency, projected that the state would spend an additional 2.3% year over year and exceeding the state's income by 2%.
Meanwhile, Newsom has already promised to use funds from California coffers to oppose Trump's agenda. This could bring the state to its financial tipping point.
In years past, a robust stock market injected much-needed cash that gave California a surplus. Unfortunately, the tide has turned, and things are not looking great for Newsom in the coming years.
The state has already had to cut funding to "temporary commitments" and other projects because of a projected $68 billion deficit in the 2024 budget. Even after the changes, California will still be $2 billion in the red.
The Legislative Analysts Office says key indicators point to the fact that it's only going to get worse. "We’re seeing declining consumer spending," Petek said.
"We’re seeing an unemployment rate that’s ticking up and very anemic, job growth, and the job growth we are getting is entirely attributable to government and healthcare, and so that is not a foundation on which our office can project comfortably that we’re going to have robust revenue growth going forward," he added. Meanwhile, expansion of government programs has only made it worse.
MediCal, the state's Medicaid program, covers healthcare even for noncitizens, and the program has become a burdensome drain. "Our advice to the legislature is that they should conduct oversight of programs and take a take stock of what their main priorities are, and try to, you know, work on addressing that misalignment," Petek recommended.
During Trump's first term in office between 2016 and 2020, California sued the administration 120 times. Now Newsom is poised to do the same, but this time with funds California simply doesn't have.
James Gallagher, GOP leader of the California state assembly, excoriated Newsom for his fiscal irresponsibility. "California has a $2 billion deficit that’s projected to explode in the next few years, and Newsom’s solution is to spend another $100 million on lawyers to fight President Trump," Gallagher said.
"You can’t lead the ‘resistance’ when you can barely pay the bills. It’s too bad Newsom is more focused on chasing headlines for his 2028 presidential run than actually running the state," Gallagher added.
Still, Newsom has signaled that he's serious about his opposition of Trump. Just 36 hours after he was elected president again, Newsom called the Legislature together for a special session to fund lawsuits for abortion rights and other leftist pet causes, the LA Times reported.
Newsom is a typical liberal politician who has no problem spending taxpayers into oblivion. Californians will revolt as the state simply can't afford it this time, and Trump will be smiling as they turn on Newsom because of it.
