California is facing a $73 billion deficit, or $15 billion higher than had been projected in January, according to the state Legislative Analyst's Office.
Initially, the analyst's office had projected the 2024-25 deficit at $58 billion, using revenue estimates from Gov. Gavin Newsom's initial budget proposal, CalMatters reported Tuesday.
However, according to the state Department of Finance, preliminary general fund receipts for January came in at $5 billion below Newsom's forecast.
Assembly Speaker Robert Rivas told reporters that the budget is high on the state Democrats' priority list, and he's concerned with the climbing deficit and doesn't see any way to avoid using state reserves, as Newsom's budget plan in January proposed.
However, he encouraged using a prudent approach to the reserves, should the budget picture continue to grow worse.
"We are very concerned about short-term fixes for long-term problems," he said.
Rivas became speaker last summer, days after the state assembly and Newsom reached a deal on the 2023-24 budget, which handled a $30 billion deficit that came after two years of record surpluses.
Rivas said his plan calls for the oversight budget subcommittee he formed in December to review state spending on housing.
Rivas did not take a stance on Newsom's rejection of calls to raise taxes or create new ones to boost the state's revenues.
"We look at all of the strategies when it comes to ensuring that we have a balanced budget — there are many of those tools that are available," he commented. "Which ones are appropriate, I'm not going to comment on that yet. That's what we're trying to figure out now."
Meanwhile, the state Department of Finance on Tuesday issued a statement calling on the state legislature to take action on plans for $8 billion in savings to address the deficit.
The governor will present his updated budget in May and a final blueprint on spending in June.
The state Republican caucus Tuesday slammed Democrats on the budget projections.
"It's time for a course correction and a renewed commitment to responsible budgeting that puts the needs of our residents first," Sen. Roger Niello, vice-chairperson of the Senate budget committee, commented.