The Budget Deficit Epidemic: How California Cities are Falling into Deeper Holes

California's Growing Budget Gap

In 2024, the state budget deficit is estimated to be between $10 billion and $70 billion, excluding unfunded public employee pension debt that totals over $1.5 trillion.

The Legislative Analyst’s Office updated spending plan in Gov. Newsom’s revised budget showed a $55 billion budget deficit as opposed to the $27.6 billion figure Newsom presented.

Cities Running on Empty

• The City of Los Angeles has a $1 billion+ city budget deficit, San Diego is over $300 million in debt, and Sacramento has a $66 million budget deficit.
• San Francisco has a $876 million budget deficit, while San Jose projected a $60 million budget shortfall before ratcheting it down to $35.6 million for 2026.
• The City of Fresno is facing a budget deficit of over $20 million in the 2026 budget, and Oakland is facing a $268 million deficit over the next two years.

Smaller cities are struggling to stay in the black due to unfunded mandates from the state and local government.

"These unfunded mandates are killing us. The Governor’s mandating that we build houses even though we don’t have the resources, i.e. Public Safety and or water to cover the offset of new housing… he doesn’t care. He’s mandating it."

The Consequences of Deficit Spending

Deficit spending can lead to increased taxes, reduced services, and a negative impact on local economies.

"They want to raise taxes on water, fertilizer, dairy, tires, guns and businesses, then-Senator Jim Nielsen told the Globe. ‘Why does the state need to raise taxes when there’s a surplus? They are spending their way into another crushing deficit that will harm the poor, blind and disabled, and squeeze the middle class once again.’

The California Budget Bill Directly

Read more about California's budget at: California Globe: How Many California Cities are Running Huge Budget Deficits?

The Reality of Gavin Newsom’s Leadership

Under Gov. Newsom's watch, spending on homelessness has increased exponentially, crime is historically high, freedoms have been restricted, and taxes greatly increased.

"Gov. Newsom smugly claims California’s population is growing, refusing to address that those coming in are illegal immigrants, and those leaving are taxpayers and business owners,"

The Future of California’s Budget

As the state budget continues to grow, it's essential for lawmakers to take a closer look at spending habits and find ways to reduce deficits.