California is facing a budget crisis with a projected record deficit of $73 billion, as reported by the Legislative Analyst’s Office.
The deficit increase is attributed to a $24 billion revenue erosion, leading to a $15 billion rise in the budget problem.
“The actual increase in the state’s budget problem will depend on a number of factors, including formula-driven spending changes, most notably Proposition 98 spending requirements for schools and community colleges,” the report read.
H.D. Palmer from California’s Department of Finance disputed the estimate, stating that $51 billion in tax receipts are expected.
“From now through April, more than $51 billion in income and corporate tax receipts are forecast to come in,” Palmer said. “No one can say today with certainty how those numbers may change the budget estimate of a $38 billion shortfall.”
“A responsible step would be for the Legislature to act now on the early action budget measures needed for $8 billion in solutions to help close this gap,” he added.
The state’s population has been declining, with many residents leaving for states like Texas, Arizona, Florida, and Washington.
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