Huge Surplus to Huge Deficit a Year Later

(AP) – California Gov. Gavin Newsom has projected a $22.5 billion budget deficit for the upcoming fiscal year. That’s a sharp turnaround from the $98 billion surplus Newsom had to work with last year. Newsom announced the deficit Tuesday as he lays out his spending priorities for the fiscal year that starts in July. The state has about $35.6 billion in reserves. The deficit isn’t surprising. The state relies heavily on taxes from the richest Californians, which can cause budget whiplash as the economy and stock market shift.