California is going broke, the state is losing even more tax revenue, and Gov. Gavin Newsom (D-CA) still wants to spend even more taxpayer dollars that the state just does not have.
According to KCRA News’s Ashley Zavala, Newsom is proposing increasing California’s budget to $348.9 billion, up from its previous budget of $321 billion. According to Zavala, Newsom is “basically proposing to let the next Governor figure out” the state’s “structural deficit issue.” Newsom is projecting a budget deficit of “just” $2.9 billion, not factoring in a possible economic downturn, which the California Legislative Analyst’s Office has when projecting the deficit to be $18 billion.
BREAKING: Despite California’s budget shortfall this year and expected problems in years to come, Gov. Gavin Newsom proposes to increase size of CA’s budget to $348.9B this upcoming year.
He’s basically proposing to let the next Governor figure out structural deficit issue
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— Ashley Zavala (@ZavalaA) January 9, 2026
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Increasing the size of California’s budget becomes more baffling the more you look into the state’s economic position. For one, the LAO’s $18 billion budget deficit projection comes despite California seeing revenue growth, making it four years in a row that the state has had a budget deficit even as revenue increases.
It is not clear how sustainable those revenue increases are, however, as California continues to drive taxpayers out of the state. Democrats have schemed a “one-time” wealth tax designed to target the state’s billionaires, putting it on the November ballot with a retroactive implementation date of Jan. 1, 2026. At least six billionaires have already moved out of California to avoid the tax (which everyone knows will not be a “one-time” tax as pitched), with up to 20 more considering the move. Those who move out after Jan. 1 would still be subjected to the tax, but California would have to spend even more in the inevitable court fight that this tax would create.
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Worse still, there is no guarantee the tax will pass. California could be looking at a scenario where it scares multiple billionaires out of the state, taking the tax revenue they generate with them, just for voters to reject the tax at the ballot box. California would have made itself poorer for no gain, a shining example of the financial planning that has put the state into this perpetual budget hole.
Newsom does not care about any of this, as he will be out of office by this time next year. When California truly hits the financial wall, it will be under a new governor, and so Newsom is content to use the state budget to build his presidential campaign talking points, even if he leaves the state worse off than when he found it. Newsom has perpetuated a cycle of California spending more money than it has and creating new taxes that still don’t cover the costs he is imposing on taxpayers, proving that he and California Democrats are the worst governing forces in the country.