California Governor Gavin Newsom has attributed the state’s shift from a $100 billion surplus to a $28 billion deficit to climate change. The deficit, which could have been even higher without recent actions, prompted Newsom and the Legislature to take early measures to reduce it by more than $17 billion. While some program cuts were implemented, the plan mainly relied on new revenue, internal borrowing, and funding delays to achieve savings.
The state’s financial woes can be traced back two years to a downturn in the stock market, high inflation affecting the housing market, and a decline in tech industry investments. These factors, compounded by severe winter storms and delayed income tax filing deadlines, resulted in revenue drops that were not adequately reflected in the spending plan adopted last summer.
Newsom highlighted the impact of the winter storms on the state’s finances, stating that unexpected weather events led to delays in tax collection, further exacerbating the deficit. He also emphasized the need to address climate change, a topic he will discuss at the upcoming Vatican climate summit.
Despite the lack of established links between climate change and the state’s recent storms, Newsom is traveling to Rome to deliver a speech on the issue. It’s worth noting that he was out of the country during the worst of the snowstorms, vacationing in Mexico.
In conclusion, Governor Newsom’s explanation for California’s deficit underscores the complex interplay of economic factors and environmental challenges facing the state.
