California Facing Record $68 Billion Deficit, Potential ‘Fiscal Budget Emergency’: Legislative Analyst

Citing a ’severe revenue decline' in the state, analysts anticipate the deficit to accumulate to more than $155 billion over the next five years.

California Gov. Gavin Newsom announces the May budget revision in Sacramento on May 12, 2023. Newsom said the state's budget deficit has grown to nearly $32 billion, about $10 billion more than predicted in January when the governor offered his first budget proposal. Hector Amezcua/The Sacramento Bee via AP

Because of a “severe revenue decline,” California is facing a $68 billion budget deficit that could accumulate to more than $155 billion over the next five years, according to the most updated projection released Dec. 7 by the nonpartisan Legislative Analyst’s Office.  

A spokesperson for California Gov. Gavin Newsom suggested some of the state’s approximately $24 billion held in reserves could be used to address the growing deficit—an idea analysts agree will be necessary.