Maybe they forgot to carry the 1? Governor Gavin Newsom announced Friday that California’s budget deficit is $10 billion more than he had projected in January.
Newsom said during a press conference that California’s budget deficit has grown to $31.5 billion, which is about $10 billion more than he anticipated in January when he offered his first budget proposal.
California has the largest budget in the nation at $306 billion and just happens to be one of the few states to have a budget shortfall this year.
California has a progressive tax system that relies heavily on rich people and taxes investment gains as regular income, meaning it gets about half its revenues from just 1 percent of the population.
When the economy is good and the stock market surges, the wealthy pay more in taxes, and revenues can soar quickly. When the economy is bad, they pay less and revenues can plunge just as fast.
In a press release, Newsom’s office said it was prepared for the shortfall.
Watch Newsom explain the math here: