Analysts Calculate Governor Solved a Budget Deficit Twice as Large as Reported in May Revision

California lawmakers have identified about $73 billion in solutions to balance the state’s 2024-25 fiscal year budget in the past months, according to a report published by the nonpartisan Legislative Analyst’s Office May 17.

According to the report, Gov. Gavin Newsom proposed about $55 billion in fixes in his budget revision released May 10, and the Legislature passed an early action plan solving $17.3 billion in a bill, signed into law April 15.

Together, both approximately equaled the analysts’ February estimate of a $73 billion shortfall.

Improving Fiscal Health

Analysts concluded that the governor’s approach of adjusting spending—nearly 90 percent of solutions he offered—will improve the state’s current fiscal situation, including $16 billion in spending reductions, to help get the state back on even footing.

“By further reducing one-time and temporary spending, the Governor leverages a ‘use it or lose it’ tool that improves budget resilience,” the report said.

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