Walters: Lagging revenue continues to drive California budget deficit
As the June 15 constitutional deadline for enacting a 2024-25 state budget approaches, the good news for Gov. Gavin Newsom is that all-important income tax revenues in April slightly exceeded the administration’s $16.3 billion assumption. Even so, the bad news is that overall revenues from income, sales and corporate taxes are still running $6 billion behind what Newsom’s January budget projected for the current fiscal year, meaning that cumulative deficit will be substantially more than the $38 billion Newsom’s proposed budget assumed. But how much more? The Legislature’s budget analyst, Gabe Petek, has estimated that the cumulative deficit for the three-year “budget window” — 2022-23, 2023-24 and 2024-25 — to be $73 billion, largely due to his more pessimistic revenue calculations. Newsom’s January budget assumes that revenues are running $44 billion under last year’s budget projections during the three-year window, while Petek raises that estimate to $68 billion. With revenue shortfalls driving the state’s deficit number — whatever it might be — everyone involved in the annual budget process was closely monitoring what April 15’s income tax filing deadline would produce. Newsom even indefinitely postponed his annual state of the state address because
