California Governor Signs Budget Act, Declares Fiscal Emergency

‘The state’s economy has behaved in ways that have defied traditional forecasts and historical precedent,’ Gov. Gavin Newsom said in the emergency declaration.

MATHER, CALIFORNIA - SEPTEMBER 13: California Gov. Gavin Newsom delivers remarks to reporters after a helicopter tour with U.S. President Joe Biden of the Caldor Fire area, at Mather Airport on September 13, 2021 in Mather, California. Biden toured the wildfire-damaged area near Sacramento with Newsom before heading to Los Angeles to participate in a No on Recall campaign event. Photo by Justin Sullivan/Getty Images

With the state facing a significant budget deficit, California Gov. Gavin Newsom signed the Legislature’s budget act into law June 26 and issued a proclamation of a fiscal emergency—thus allowing the state to tap reserves to help cover the shortfall.

“I have determined that estimated resources are inadequate to fund General Fund expenditures for the current or ensuing fiscal year, which constitutes a budget emergency,” Mr. Newsom said in the emergency declaration.