BLUE STATE BLUES: California agencies discuss what to cut as state deals with $35B deficit.
In January, the Governor’s Office projected only a $3 billion budget shortfall next year, well under the Legislative Analyst’s Office projections of an $18 billion shortfall in its budget released in November 2025.
Since that time, the conflict in Iran and an $8.6 billion increase in tax revenues have improved the budget outlook, but increasing costs in Medi-Cal spending has complicated the revenue picture, Palmer said. He noted nothing is final in the next version of the governor’s budget.
Newsom made it clear in January that he is attempting to solve the budget problems not only in 2026-27, but the following fiscal year as well, Palmer told The Center Square.
Meanwhile: The cost of High-Speed Rail is now estimated at $231 billion.
Ditching HSR would patch plenty of holes in the budget, but then what would Dems do for graft?
