andhra_jp Posted February 24 Author Report Posted February 24 Is California going bankrupt? What DOGE Chief Elon Musk said Elon Musk warns California risks bankruptcy without reforms. Despite Newsom’s balanced $322B budget, experts predict $20–$30B deficits due to volatile tax revenue and federal aid reliance. A $40B wildfire aid request may add further strain. Deficit concerns in California’s Budget Despite Governor Gavin Newsom presenting a balanced $322 billion state budget for 2024, financial experts remain worried about the state’s long-term fiscal health. California has a history of large deficits, with a $46.8 billion shortfall last year and $32 billion the year before. While higher-than-expected tax revenues have temporarily improved the state’s financial position, the budget remains highly dependent on volatile sources of income. A key issue is California’s reliance on capital gains taxes, where nearly half of the state’s income tax revenue is generated from just 1% of the population. This heavy dependence makes California’s finances highly susceptible to stock market fluctuations and economic downturns. The Legislative Analyst’s Office has already warned of potential deficits ranging between $20 billion and $30 billion in the coming years, raising concerns about sustainability. Additionally, uncertainty at the federal level under President Donald Trump poses risks, as one-third of California’s budget relies on federal aid, particularly for healthcare programs. If Trump enacts cuts to federal funding, lawmakers may be forced to make severe spending reductions. Calls for long-term fiscal planning Republican lawmakers have criticized Newsom’s budget proposal, arguing that it lacks a long-term strategy to address the state’s structural financial issues. State Senator Roger Niello warned, “Unless we start doing something to address that now, it’s going to become very difficult.” In response to these concerns, Newsom has introduced cost-cutting measures such as eliminating 6,500 vacant state positions and reducing $3.5 billion in travel and IT expenses. However, analysts argue that deeper structural reforms may be necessary to prevent a future fiscal crisis. Wildfire aid request adds to Budget pressures Adding to California’s financial strain, Newsom has formally requested $40 billion in federal aid to assist with wildfire recovery efforts in Los Angeles. The devastating fires have resulted in over $250 billion in economic losses, with real estate damages from the Palisades and Eaton fires alone exceeding $30 billion. Newsom’s request includes $16.8 billion from FEMA, $9.9 billion from HUD, and $5.29 billion from the SBA to support fire victims, homeowners, businesses, and infrastructure rebuilding efforts. However, obtaining federal assistance may prove challenging, as the Trump administration has hinted at attaching conditions to aid approval. Some officials have suggested that California must defund the California Coastal Commission, a regulatory agency overseeing coastal development. If aid is delayed or restricted, the state may have to reallocate its own funds, further complicating its budget outlook. Quote
Anta Assamey Posted February 24 Report Posted February 24 Veedu EV credit anni kottesi car lu ammi...Money waste avutundi.. Ippudu Gov. Efficiency DOGE antaduu enti.. Quote
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