The Golden State? Newsom Admits that California Deficit is Now Roughly $32 Billion

Recently, a witness at one of California’s reparations hearings demanded “where’s the money?” Gov. Gavin Newsom’s announcement that the state miscalculated its deficit by $10 billion seems to answer that question. As his reparations Task Force demands as much as $1.2 million per eligible black resident, Newsom recently balked at cash payments. After years of using reparations as a political issue and insisting that such payments are a moral imperative, many are pushing back that this bill is now due. A card will just not do.

The new figure puts California’s debt at a towering $32 billion.

There are various contributors to the shortfall including a progressive tax system that makes revenues dependent on the income of wealthy taxpayers. When the stock market falls, revenues fall. There is also the mass exodus from the state of higher income citizens. Some are fed up with rising crime and taxes. It does not help when California publicly debates not just massive reparations payments but retroactive taxes for those who leave the state.

There are also now mass tech layoffs and a building recession.

Newsom expressed confidence that the state could handle the deficit and that is likely true. The state has a massive budget of $306 billion and he is looking at cuts. He has already scaled back funding for climate proposals to $48 billion, from $54 billion.

He also has a net reserve. However, just a year ago, Newsom was publicly celebrating a claimed budget surplus of $97 billion and said it was “simply without precedent.”

This year, Newsom admitted that the state would face a deficit of $22.5 billion, which he called “modest shortfall.”

Democrats are now calling for increasing taxes on large corporations and suspending a major business tax credit to raise new funds. Newsom is opposing those proposals.

The budget shortfall is massive, but so is California’s economy. The state also has a reported reserve fund, though this deficit would largely wipe out that fund of $37 billion and Newsom has vowed not to touch it.

The immediate political question is whether, after years of politicking on the issue, residents will be willing to take an IOU or non-cash “reforms” in lieu of reparation payments.

The longer term question is how to reverse the exodus of high-income citizens who are tired of rising tax and crime rates. While some in the media have pushed back by saying that the state has more people moving in than out, California and New York are losing higher earners who pay most of the taxes. Much of the difference is made up in foreign immigration.

Forbes put California as the state with the highest net loss of households followed by New York and Illinois. The Bay Area is one of the hardest hit.

I have always loved California where I spent much of my youth due to my grandparents living in Cherry Valley (near Riverside). I love the hiking and beautiful coasts. I believe that the state has the resources to pull out of this crisis, but I am increasingly concerned about the trajectory of the state.  Across the board, California has the highest taxes in areas like gasoline and other necessities. At the same time, while Democrats continue to insist that the wealthy do not “pay their fair share,” the top 5 percent of high-income taxpayers in California pay 70 percent of personal income tax revenue.

Nationally, the top one percent of taxpayers pay 42 percent of all taxes.

That is why the exodus could prove a cascading problem for California. While Newsom has run ads attacking Florida, that state is exploding in population, including many high-income households.


99 thoughts on “The Golden State? Newsom Admits that California Deficit is Now Roughly $32 Billion”

  1. Black Americans in 2023, are, on average, worse off than they would have been without the Democratic Party’s history of slavery, Jim Crow, and, most of all, the Great Society programs. The intentional and unintentional damage inflicted by Democrats on Black Americans has been immense. Rather than throwing cash at the problem, however, which would largely evaporate in a generation or so, why not dismantle the incentives built into the Great Society programs for men to abandon their children and the mothers of their children? And why not give free tuition vouchers over the next 30 years for Black Americans of all ages to attend public and private K-12 schools, trade schools, and universities?

  2. California & New York are both broke. They have succumbed to the socialist siren, their citizen-taxpayers dashed against the rocks with no positive outlook on the horizon.
    Foolish egalitarian utopian policies will continue to be hoisted on their citizens because voters in that failing state cannot even muster up enough votes to throw grewsone-Newsome out of office. The accidental governor of New York, Hochul treating NY citizens pretty much the same.
    Unfortunately the Biden* administration is taking all its cues from these rogue states.

  3. While red state population growth is an indicator of policies that improve quality of life, as people vote with their feet, the downside is that people tend to continue to vote as before. The conservative minority who flee Democrat states like CA and NY continue to vote Republican and Libertarian, while the Democrat supermajority who flee the results of their own vote continue to vote Democrat and Green Party. There are enough Democrats left behind to keep the home state blue, while the exodus shifts red states purple or, worse, blue, spreading like a plague.

    If voters do not become more savvy about the result of their votes, then the entire country will devolve into California, rife with crime, homelessness, unaffordable taxes, electric cars that run on batteries created from real slave labor in the Congo, which are junked at the end of the battery’s useful life, left to leak toxins, and so on.

    This is how great countries rot from within. People throw their blessings away with both hands.

  4. Let’s discuss the concept of the rich not paying “their fair share.” “Fair” is subjective. To some people, it is unfair if there is any disparity of income at all, all wealth and assets must be seized, and everyone given a stipend to live on. Currently, the wealthy and middle class pay all the taxes in the state, building bridges, roads, and maintaining schools, that the poor use for free, only paying sales and gas taxes.

    The successful pay for all those expensive benefits that CA doles out, yet the hunger for more is insatiable. It brings to mind that infamous psychological experiment, in which it was determined that participants were far more likely to administer a mild electric shock to other people, than to themselves. Raising taxes is financial punishment. Voters are far more likely to raise taxes on the abstract wealthy than they are to raise taxes on themselves. It’s like two wolves and a lamb deciding what’s for dinner. Through this means, eventually, voters will just vote to take more until the wealthy all leave the state, leaving the voters to raise taxes on themselves.

  5. California has been a Democrat supermajority for decades. The condition of the state is what will be accomplished when Democrats get everything they want, unopposed. Rampant shoplifting from raising the felony threshold above $950, rampant crime, from a far Left DA publicizing a long list of crimes his office will refuse to enforce, a very high percentage of illegal aliens due to sanctuary cities and Democrats’ successful efforts to keep the border open, high gas prices from gas taxes and regulations, high cost of all goods and services from the cost of fuel, as well as from the cost of businesses obtaining expensive new vehicles when the California Air Resources Board (CARB) declared no heavy or medium duty vehicles may be registered that were made prior to 2010, high taxes, and the high cost of doing business. This drives taxpayers and businesses out of state in droves.

    For years, Democrats would dismiss the exodus of tax payers and businesses with comments such as, “Don’t let the door hit you in the butt as you leave.” The state relied on tax revenue from Silicon Valley, Hollywood, and the wealthy. However, Gov Newsom’s repeated efforts to impose an asset tax that would hit taxpayers a full ten years after they leave the state, repeated minimum wage hikes, rising crime, homeless camps everywhere, defunded police, and the onerous, years-long paperwork process of moving businesses out of state, has led to Silicon Valley, major corporations, the wealthy, and the film industry relocating out of state. Unfortunately, people in this demographic tend to continue to vote Democrat in their new red state homes, not linking the reasons they want to move with the consequences of their vote.

    For years, Newsom claimed there was a budget surplus, and none of my Democrat friends believed me when I said there was actually a shortfall. Covid relief funds hid the true, dire nature of California’s finances.

    Rather than reverse course, the Democrat hegemony have decided to ban gas powered vehicles in upcoming years, increase minimum wage again, require businesses to pay a use tax on items bought out of state, and create a task force on incurring inconceivable debt for Reparations from a state that never allowed slavery to people who were never slaves.

    1. “threshold above $950, “

      I’m thinking of doing my shopping in California.

      …And here is a headline from the golden state 🙂

      California Mayor Warns
      That If Local Walmart Locations Close
      People Have Fewer Places To Shoplift

  6. Gov Newsom quote “California is not broke, there are still plenty of checks in the checkbook”…

    1. California is going to crumble to ashes before succeeding in any endeavor whatsoever, most of all the sorts of idiot goals which are NOT a threat, nor which have a REAL solution, such as … yes – Global Warming.

  7. Newsom now says he may pay some money in reparations.

    Brilliant! A work of genius fit for California!

    Newsom has found a way to waste a lot of money, accomplish nothing, and p…off everyone!

    1. LOL;), That’s those Aholes Total Game!!!!!!!!!!!!!!

      Load the US & the States with an unpayable Debt & replace the domestic gen pop with low IQ 3rd word sh*tholers, & clam they’ll fix all the problems they/Globalist Banking Trash Caused if We the Free Citizen just surrender all the nations assets to them & all the Rights of our USC.

      Those international banks & all those NGO charities need to have their assets seized to pay for their Deadbeat Azzes bad Debt & Damages!

      And if you don’t do it now your sons/grandsons are forever slaves again or wiped out, gone. I’m not kidding, it’s the best of my research.


      1. Exactly . Flooding America with a sea of low ability immigrants receptive to tyranny is the icing on the cake . They need to dilute popular angst against the uniparty and cant indoctrinate school children fast enough to get to that borg percentage.

    2. How do we collect the debt of what black people owe California? Much of the state overspending is due to them. They commit crime way out of proportion to other races and make up a large portion of the prisons and their budgets. They murder each other costing us money as well.

    3. @ Young,

      Newsom is pro-reparations precisely because he knows it can’t happen therefore there’s no downside in being against it.

  8. I’ve felt for a very long time, that certain individuals from both parties, but more notably the Democrat party, should invest in personal Kevlar.

  9. . . . California years back was a world leader in pumping oil out of the ground . . . “DRILL BABY DRILL” selling the state’s oil into the marketplace ( I believe that the USA , even California is not a member of OPEC ) at whatever price we decide. C’mon Gavin . . . generate REAL income / revenue, NOT the “tax the rich, to pay their fair share” talking point to the super majority one party rule of a once dynamic state . . .

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