Last Monday Governor Newsom issued a press release previewing a “balanced” budget for 2025-26 so imagine our surprise when his proposed budget released today disclosed that balance was achieved by transferring $7.1 billion from the Rainy Day Fund. In your household do you consider your budget balanced if you dip into savings to cover a deficit? We don’t. In fact, when the Monday press release extolled that “state revenues are up by $16.5 billion,” we expected the proposed budget would not only not draw from the Rainy Day Fund but also would pay back $4.9 billion taken from the Rainy Day Fund last year. It’s misleading to characterize such a budget as “balanced” and worrisome that Newsom keeps taking money from the Rainy Day Fund when the economy and stock market are vibrant and reserves might be needed more than ever. We’re still reading through the document and will have more to say but this is not a good start.
