REALITY ONLY BITES AFTER YOU’VE BEEN DENYING IT: Economic reality bites as Newsom faces a big California budget problem.
During his much ballyhooed, nationally televised debate with Florida Gov. Ron DeSantis last week, California Gov. Gavin Newsom boasted that the state’s economy is “booming” and leads the nation.
“California has no peers,” Newsom declared. “California dominates.”
About 18 hours later, reality reared its ugly head. The Legislative Analyst’s Office revealed that state tax revenues are running tens of billions of dollars behind expectations due to a slowing economy, creating a monumental budget headache.
The dilemma became apparent when the November income tax filing deadline – seven months later than the original date – passed, and tax receipts for 2022 could finally be counted.
“With the recent receipt of various postponed tax payments, the impact of recent economic weakness and last year’s financial market distress on state revenues has become clearer,” the LAO authors said in a preliminary report on the state’s fiscal situation. “The postponed payments came in much weaker than anticipated.”
h/t Stephen Green