California Assembly Republican Caucus
New LAO report shows short-term revenue growth while California drains reserves and carries up to $34 billion in debt.
SACRAMENTO — In case you missed it, the Legislative Analyst’s Office (LAO) released a new revenue forecast showing California is bringing in billions more in revenue than expected. Despite the increase, the state budget continues to rely on roughly $10 billion from the Rainy Day Fund and is carrying a growing “Wall of Debt” totaling between $32 and $34 billion.
The LAO, Department of Finance, and legislative budget experts all agree the revenue surge is temporary and should be treated as a one-time windfall, not ongoing money to support permanent new spending. At the same time, both the LAO and Department of Finance project multi-billion-dollar deficits in future years, even with the current revenue bump.
“California is bringing in so much money, but Democrats are still draining our reserves and piling up debt,” said Assembly Republican Leader Heath Flora. “Instead of saving for the next rainy day, they’re spending every dollar like it’s burning a hole in their pocket.”
According to the LAO, the current budget remains balanced only by withdrawing billions from constitutionally protected reserves, while the state continues to carry tens of billions of dollars in budgetary borrowing accumulated over recent years.
“When the experts tell you the money is one-time only, the worst thing you can do is spend it like it’s permanent,” Flora added. “Republicans are focused on protecting California’s financial stability and avoiding the kind of budget crises that hurt working families the most.”
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