Last year, Governor Newsom and the California Legislature took nearly $5 billion from the Rainy Day Fund to cover excessive spending. That’s because annual General Fund Expenditures have grown 65 percent since Newsom took office, a compound annual growth rate of nearly nine percent:
Now, in his proposed budget for 2025-26, Newsom proposes to take $7.1 billion more from the Rainy Day Fund:
Draining the Rainy Day Fund is very dangerous, as Newsom’s Multiyear Forecast illustrates:
Even in a world in which he forecasts rising tax revenues, Newsom forecasts negative General Fund balances. Imagine if tax revenues fall.
Stock markets don’t always go up. Newsom and the Legislature must reduce spending and replenish the Rainy Day Fund now.
