Report: California likely to have $25 billion budget deficit

By ADAM BEAM
Associated Press

SACRAMENTO, Calif. (AP) — California will likely have a $25 billion budget deficit next year. The nonpartisan Legislative Analyst’s Office said Wednesday that state revenues are $41 billion below expectations. Revenue has increased steadily in the nation’s most populous state for the past decade. Earlier this year, lawmakers approved a spending plan that included a $72.4 billion surplus. That pushed total state spending above $300 billion for the first time. But tax collections have slowed significantly since then. Democratic-controlled California taxes rich people more than other states. That makes the state more susceptible to dips in the stock market.