Despite the gloomy outlook, California is in a better position to weather an economic downturn than it has been in the past.
Alexander Spatari via Getty Imageswill likely have a $25 billion budget deficit next year, state officials announced Wednesday, ending a run of historic surpluses and acting as a warning to other states about a potential recession.
The shortfall won’t endanger some of California’s major expansions of government services, including free kindergarten for 4-year-olds and free health care for low-income immigrants living in the country without legal permission. “While we’re in fact better prepared, that doesn’t mean that the decisions to close the coming budget gap won’t be difficult — particularly if the economic conditions that have slowed the economy continue, or get worse,” California Department of Finance spokesman H.D. Palmer said.And it has plenty of cash available to meet its obligations this year. “It’s not insignificant, but it’s also manageable,” Legislative Analyst Gabriel Petek said of the deficit.
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