$68 Billion Deficit ~ Unprecedented Revenue Shortfall Creates Unique Challenges for California

The 2024‑25 Budget
California’s Fiscal Outlook

Executive Summary

California Faces a $68 Billion Deficit. Largely as a result of a severe revenue decline in 2022‑23, the state faces a serious budget deficit. Specifically, under the state’s current law and policy, we estimate the Legislature will need to solve a budget problem of $68 billion in the upcoming budget process. 

Unprecedented Prior‑Year Revenue Shortfall Creates Unique Challenges. Typically, the budget process does not involve large changes in revenue in the prior year (in this case, 2022‑23). This is because prior‑year taxes usually have been filed and associated revenues collected. Due to the state conforming to federal tax filing extensions, however, the Legislature is gaining a complete picture of 2022‑23 tax collections after the fiscal year has already ended. Specifically, we estimate that 2022‑23 revenue will be $26 billion below budget act estimates. This creates unique and difficult challenges—including limiting the Legislature’s options for addressing the budget problem. 

Legislature Has Multiple Tools Available to Address Budget Problem. While addressing a deficit of this scope will be challenging, the Legislature has a number of options available to do so. In particular, the state has nearly $24 billion in reserves to address the budget problem. In addition, there are options to reduce spending on schools and community colleges that could address nearly $17 billion of the budget problem. Further adjustments to other areas of the budget, such as reductions to one‑time spending, could address at least an additional $10 billion or so. These options and some others, like cost shifts, would allow the Legislature to solve most of the deficit largely without impacting the state’s core ongoing service level.

Legislature Will Have Fewer Options to Address Multiyear Deficits in the Coming Years. Given the state faces a serious budget problem, using general purpose reserves this year is merited. That said, we suggest the Legislature exercise some caution when deploying tools like reserves and cost shifts. The state’s reserves are unlikely to be sufficient to cover the state’s multiyear deficits—which average $30 billion per year under our estimates. These deficits likely necessitate ongoing spending reductions, revenue increases, or both. As a result, preserving a substantial portion—potentially up to half—of reserves would provide a helpful cushion in light of the anticipated shortfalls that lie ahead.

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  Post Views: 19 YREKA – The Blue Ribbon Award was created by the Western Fairs Association, the premier organization dedicated to supporting and promoting the fair industry in the Western United States and Canada, to honor those that go above and beyond to support their annual fair.  The 10th District Agricultural Association Board of Directors,
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  Post Views: 14 YREKA- The 10th District Agricultural Association Board of Directors is happy to announce a Lifetime Pass will be presented to Kenny Elwood of Bella Vista. The pass will be given at the opening ceremonies of the Siskiyou Golden Fair on June 24th.  Opening ceremony begins at 5:00 PM at the fairground flagpole
• FICTITIOUS BUSINESS NAME STATEMENT: Carson’s Window Coverings & More
  Post Views: 18 Filing No.: 2026-47-0190FILED IN: Siskiyou CountyDATE: 06-03-2026Laura Bynam, ClerkBy: D.Brooks,Deputy ClerkFICTITIOUS BUSINESS NAME STATEMENTThe following person (persons) is (are) doing business as:Carson’s Window Coverings & More108 S. BroadwayYreka, CA 96097 in SiskiyouMailing Address:108 S. BroadwayYreka, CA 96097530 598-9247Registered Owner(s):Maridee CarsonThis Business is conducted by: An IndividualThe registrant commenced to transact business under
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  Post Views: 33 Source – Siskiyou County Sheriff’s Office -$1.9 Million Cocaine Seizure Results in Arrest- On May 29, 2026 at approximately 1150 hours, a Siskiyou County Deputy conducted a traffic stop on a 2022 Mazda CX5 for a mechanical violation. During the traffic stop, the driver was found to be unlicensed and demonstrating multiple
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  Post Views: 22 Siskiyou County, California — Residents in Siskiyou County and surrounding areas may notice increased jet activity and noise in the skies over Shasta Valley and nearby regions as a squadron of advanced F-35A Lightning II fighters from Luke Air Force Base, Arizona, trains with the Oregon Air National Guard’s 173rd Fighter Wing.