When Gov. Gavin Newsom proposed a 2023-24 budget in January, he acknowledged that the revenue estimates made six months earlier were way too optimistic and that the state had evolved from a nearly $100 billion surplus to a $22.5 billion deficit.
Through February, the administration reported, revenues were running nearly $5 billion below expectations and they fell short by nearly $1 billion more in March. The next stop for the annual budget process will come in May, when Newsom must unveil revised revenue estimates and appropriations. The worsening revenue data set the stage for what could be contentious negotiations with a June 15 constitutional deadline for passing a budget.
Although Newsom insisted at the time that much of that spending was one-time in nature and therefore wouldn’t make unsustainable long-term commitments, it nevertheless raised expectations of permanency. Thus, when Newsom offered a new budget in January, he clawed back many of those allocations, particularly those that hadn’t yet been spent, sparking complaints from would-be recipients.