California is broke. Forty years ago President Ronald Reagan shut out Walter Mondale in his re-election bid. The state has boundless opportunity and natural beauty, but now it’s degenerated by its own accounting. The Center Square is a news outlet based on state and local government. It reported it’s Annual Comprehensive Financial Report, filed almost a year late, showed liabilities of over $55 billion.
The California books
There has been growth after COVID in the lucrative tech industry but it’s not enough to overcome the huge deficit. The future doesn’t look bright. A deficit of $73 billion is forecast for 2024-2025..
Taxpayer funded benefits to illegal immigrants and Texas’ border control activities diverting immigrants may push that number higher, especially if job growth remains slow. The state also has $29 billion in misspent pandemic benefits that may need to be repaid.
California misspent COVID benefits
The 374-page financial report outlined the numbers in black and white. “California’s economy, the largest among the 50 states, accounted for 14.2% of the U.S. Gross Domestic Product (GDP) in 2022 and continued to rank fifth largest in the world (in terms of GDP) at the end of the year.”
The state has enormous potential but it shows liability being multiplied instead. Democrat Governor Gavin Newsom has presided over this. Marc Joffe of the Cato Institute wrote,
“[W]hile Gavin Newsom’s California aspires to take on the world’s ‘big, hairy, audacious goals,’ it remains unable to reliably tackle the less glamorous challenge of running a transparent, financially responsible government.”
Joffe understated the problem
If the problem was only one paper, it might recover. But elected officials have only compounded it with insanity.
Crime has gone through the roof and the state’s unchecked immigration policies only encourage it. There’s human waste everywhere so people have voted with their feet and left. The 2020 census revealed California lost enough people to lose an electoral vote. It’s the only state west of the Mississippi to have lost that representation. The exodus continues with a projected loss of $350 million in tax revenue. The deep blue state became more blue but smaller.
