When Gov. Gavin Newsom and legislative leaders were drafting a more-or-less final 2025-26 state budget last month, they were closing what they described as a $12 billion deficit, a number that the state’s media repeatedly cited.
It was the wrong number; it minimizes the state’s chronic gap between income and outgo, as the state’s official budget summary released this week confirms.
The budget projects that the state will receive $208.6 billion in general fund revenues during the fiscal year that began on July 1, but it will spend $228.4 billion, a gap just shy of $20 billion.
The $12 billion figure stems from counting a $7.1 billion diversion from one of the state’s reserve accounts as revenue — an assumption that violates common sense as well as any legitimate accounting scenario.