There is another option that would ease the political pressure on lawmakers: Dipping into the state’s “rainy day” reserves. “Our best estimate is that revenues for these two years will be roughly $10 billion lower – implying a larger budget problem by about $7 billion.”īasically, Patek was saying, as tough as the spending cuts Newsom proposes may be, he and the Legislature need to tighten more to cover an even larger deficit. “In particular, using recent revenue collections and economic data, we estimate there is a two‑in‑three chance that state revenues will be lower than the governor’s budget estimates for 2022‑‑24,” Patek wrote in a new analysis. Last week, the Legislature’s budget analyst, Gabe Patek, declared that revenues will probably be markedly lower than what Newsom assumed, and the governor’s budget is “likely unaffordable in future years.” Legislative allies of the aggrieved stakeholders are being squeezed between their demands and fiscal reality.Īs difficult as this year’s budget process may be, the situation is likely worse than what Newsom projects in his proposed budget. Political fallout from the sudden reversal of fortunes promises to make this year’s version of the annual budget process much more contentious than last year’s euphoria.

Environmentalists and leaders of the state’s financially perilous transit systems were among the loudest.

Predictably, advocates for programs and services that wouldn’t receive the extra spending the previous budget had promised began complaining and demanding restoration.

Future comin out strong suspect