Yesterday I was asking what “tens of billions” of dollars for California’s budget deficit meant. Turns out, it means upwards of $54 billion:
California faces a $54.3 billion deficit as the coronavirus pandemic hammers the economy, the state’s worst budget gap since the Great Recession, state finance officials said Thursday.
The shortfall is almost 37 percent of the current $147.8 billion general fund budget and foretells widespread program cuts absent a federal bailout. K-12 schools and community colleges stand to lose $18 billion alone and are clamoring for money to adapt campuses to a new social distancing reality.
The Department of Finance released its projections in a rare fiscal update a week before Gov. Gavin Newsom is expected to roll out his May budget revision, his first post-coronavirus spending plan. The deficit projection extends to the remainder of this fiscal year and through the 2020-21 period that starts July 1…
The bulk of the deficit comes from a projected $41.2 billion revenue decline over the next 14 months, a drop from the ebullient outlook the state had just four months earlier, according to the Department of Finance. Forecasters believe the state’s big three tax sources — personal income, sales and corporations — will plunge about 25 percent.
As usually happens in a recession, the state will likely see soaring demand for health and human services programs, adding $7.1 billion in costs, the Finance Department said. California can expect to spend $6 billion on other new expenditures, most related to the coronavirus response.