CalMatters is a nonprofit newsroom that focuses on covering statewide issues affecting Californians. The state’s budget is currently facing a structural deficit, with revenues falling short of mandated spending. Governor Gavin Newsom and the Legislature have resorted to borrowing and creative accounting to cover the gap, but the problem persists with projected multibillion-dollar shortfalls each year.
Cities like Los Angeles and San Francisco are also struggling financially, with deficits in the hundreds of millions. Schools districts are facing budget gaps due to declining enrollment and rising costs, exacerbated by the expiration of federal grants and demands for raises. Options to balance budgets include real spending reductions, tax increases, or gimmicks similar to the state’s tactics.
The Fiscal Crisis and Management Assistance Team highlighted Oakland and San Francisco school systems as facing significant financial challenges, impacted by enrollment declines and rising costs.
Local officials are in a bind, with voters unlikely to approve tax increases to close the budget gaps. Tough decisions lie ahead, including potential layoffs and school closures. CalMatters continues to provide nonpartisan, independent coverage of these critical issues in California, seeking to inform and empower readers while holding those in power accountable. Consider supporting CalMatters to ensure their essential journalism continues.
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