California's COVID-19-induced budget deficits will continue through at least 2024, the state's nonpartisan Legislative Analyst's Office said Friday, totaling up to $126 billion depending on the severity of the recession.
The report from the Legislative Analyst's Office says state lawmakers can expect budget deficits of about $20 billion per year going forward — but that's only if the economy begins to recover this summer. If the downturn lingers into 2021, the deficits could average up to $30 billion per year.
“It's not like this is a shock to the economy and a shock to the budget and then everything will go back to normal,” said Legislative Analyst Gabriel Petek. “Our analysis suggests this is going to be a multiple-year problem.”
The analysis shows the state could lose up to $39 billion in revenue this year, similar to the $41.2 billion revenue loss Gov. Gavin Newsom's administration projected on Thursday. But the two disagree on the size of the state's deficit, with Newsom estimating a $54.3 billion hole while Petek says the deficit could reach up to $31 billion.
The difference is because Newsom's estimate is based on the $222.2 billion spending plan he proposed in January. The Legislative Analyst's Office built its projections based on the $208 billion spending plan lawmakers approved last year.
— Associated Press