Credit ratings agency Fitch Ratings said California Governor Gavin Newsom’s newly proposed budget could “weaken fiscal resilience” in future downturns. These include concerns that the governor is utilizing “a combination of structural and temporary budget adjustments, a number of which are more typically used in a downturn” to address what it says is “unusual in a slower, but still growing economy.” California faces a $68 billion budget deficit for the 2024-2025 fiscal year, according to the state-run, non-partisan Legislative Analyst’s Office. Meanwhile, the governor plans only on cutting $8.5 billion in spending and spending delays, while also spending $12.2 billion, or more than half the state’s rainy day fund, to plug some of the gap.
