Becerra (and us) will pay for Newsom’s last Budget

California’s budget has grown faster than its revenue for years, and the gap is now structural. State spending has risen roughly $100 billion since Newsom’s first full fiscal year, outpacing revenue growth by about 10 percent. The nonpartisan Legislative Analyst’s Office projects an eighteen-billion-dollar budget problem for twenty twenty-six twenty-seven, with structural deficits climbing to around thirty-five billion dollars a year starting in twenty twenty-seven twenty-eight if nothing changes. And don't expect the federal government, whose debt topped 40 trillion, to come in and somehow cover the shortfalls.

That growth in the income-to-spending ratio has been papered over with short-term fixes. The state has already solved $125 billion in budget problems over the last three years, mostly with one-time measures. Internal borrowing has climbed to $21 billion, the rainy-day fund sits near $14 billion, and California still owes nearly $20 billion in pandemic-era unemployment debt to the federal government. The books look balanced on paper, but the underlying imbalance keeps widening.

The Los Angeles Times reported in May that if Newsom does not fix the structural deficit, the problem lands squarely on the next governor. That successor would face drastic across-the-board cuts with limited reserves, especially if a recession hits. Former Controller Betty Yee said one-time solutions have only made the chronic problem worse.

Whoever takes office in January—likely Xavier Becerra—inherits a maxed-out, complicated credit card, and everyone who watches government sees it. The delayed Medi-Cal cuts and asset-test changes from this year’s budget only kick in after July twenty twenty-seven, so the new governor will be the one actually implementing the hard choices the outgoing administration pushed down the road. A stock-market downturn or federal funding cuts would turn a difficult situation into a genuine crisis, with far fewer options than previous administrations had. You can only do bad government fiscal policy for so long until it collapses.