California Governor Gavin Newsom and state lawmakers are bracing for a $10 billion budget shortfall — even before federal spending cuts undertaken by the Trump administration and the Department of Government Efficiency (DOGE).
Newsom and the Democrats took a near-$100 billion surplus in 2022– partly fueled by federal coronavirus funds under the Biden administration — to a near-$50 billion deficit in 2024.
Earlier this year, the state was forced to borrow $6.2 billion to fund Medi-Cal, the state’s Medicaid program, which Newsom and his party expanded to cover illegal aliens.
Now, according to Politico, Newsom and the Democrats are bracing for even more deficits in the near future:
Gov. Gavin Newsom is likely staring down a $10 billion budget hole that could deepen to $20 billion or more.
President Donald Trump’s tariff policies, a Medi-Cal shortfall and delayed tax filings from Los Angeles-area wildfire victims are putting the state in a worse economic situation than the California governor previously anticipated — and that’s without taking into account expected federal spending cuts.
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In early January, the governor’s Department of Finance projected the state would see a small surplus this year. But Newsom and legislative leaders are now flying blind into budget crunch time, as tariffs and a lack of tax receipts — including those from some of the wealthiest Californians — are stoking financial uncertainty.
Newsom’s performance is coming under the spotlight as he prepares for a likely presidential run in 2028.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of Trump 2.0: The Most Dramatic ‘First 100 Days’ in Presidential History, available for Amazon Kindle. He is also the author of The Trumpian Virtues: The Lessons and Legacy of Donald Trump’s Presidency, now available on Audible. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
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