Business & Economy

California faces $25 billion deficit next year

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California’s government faces a $25 billion deficit next year. That’s the gist of the new state legislative analyst’s report.

A month after the legislature passed a “balanced” budget, the state’s nonpartisan legislative analyst says it’s out of balance again.

Michael Cohen with the office says staffers found about $6 billion in faulty assumptions. "Those solutions that were adopted in this year’s budget – are they actually generating the savings and solutions that people were expecting?"

Three-and-a-half billion dollars in federal money has yet to materialize. So has a billion dollar cut to prison spending.

The passage of Prop 22 erased another $800 million in budget solutions. Add to that a $19 billion gap between what the state plans to spend and revenue it hopes to collect.

Cohen says part of that gap comes from one-time solutions lawmakers enacted that will expire. "There’s always ways to come up with these one-time solutions to patch over the problem and just sort of limp through another year. But what we’ve been noticing is that it puts a greater and greater strain on the following year’s budget. So that the more that you do that the harder it is to ever get back ahead."

The legislative analyst says that unless lawmakers come up with long-term solutions, California faces $20 billion deficits for the next few years.