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CA Struggles Will Be Intensified by $68 Billion Budget Deficit, Ballot Battles in 2024

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Despite spending billions, California has made very little progress, if any, on narrowing its housing shortage and its levels of homelessness and poverty. (AP File)
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California enters the new year with its existential issues still unresolved, and a new one — an immense budget deficit — threatens to make dealing with them even more difficult.

Dan Walters with a serious expression

Dan Walters

CalMatters

Opinion

California has made very little progress, if any, on narrowing its shortage of housing, its levels of homelessness and poverty remain among the nation’s highest, and its population is declining as hundreds of thousands of Californians decamp for other states.

The Legislature’s budget analyst has calculated that California faces a $68 billion gap between revenue and already programmed spending over a three-year period that began in 2022. Annual deficits in the $30 billion range thereafter.

Next week, Gov. Gavin Newsom will quantify his version of the yawning gap and how he proposes to close it, touching off six months of negotiations with the Legislature on a 2024-25 budget.

It will dominate election-year discourse in California and complicate Newsom’s simultaneous efforts to expand his national political image by portraying California as a model of compassionate and effective governance that should be emulated elsewhere.

Newsom and other statewide officials – Democrats all – will not be on the ballot this year, and it’s certain that Democrats will continue to enjoy supermajorities in both legislative houses. California’s only electoral uncertainties are which of three Democrats will fill the late Dianne Feinstein’s seat in the U.S. Senate and outcomes in as many as 10 congressional districts that could determine which party controls the House of Representatives.

Battle of Competing Ballot Measures

The big election year action will be on a spate of high-dollar ballot measures, particularly those that would affect how Californians are taxed. While it’s coincidental that tax issues are arising just as the state experiences one of its periodic budget deficits, the juxtaposition does give the campaigns for and against them an added flavor.

The most prominent tax measure, sponsored by the California Business Roundtable and other corporate groups, would make raising state and local taxes more difficult. If passed, it would require voter approval of any state tax increases and increase voting thresholds for local taxes.

Democrats and their allies, especially public employee unions, despise the measure, and the Legislature seeks to undermine it with a constitutional amendment — also on the November ballot —  that would increase the required voting margin for measures that increase margins for taxes.

In addition to those dueling propositions, a third measure, also placed on the November ballot by the Legislature, would lower the voting threshold for local taxes and bonds for infrastructure improvements. Having competing ballot measures on the same issue has become something of a trend in recent elections.

Those, however, are just three of the propositions that will, or could be, placed before voters this year.

Three other biggies are: a business-backed initiative to repeal the Private Attorney General Act, a unique California law that allows private citizens to file class-action lawsuits against corporations; an oil industry referendum that would repeal the Legislature’s imposition of a 3,200-foot buffer between oil wells and “sensitive receptors” such as schools and homes; and the latest of many attempts to make it easier to enact rent control laws.

All in all, voters will decide one measure on the March primary ballot — Newsom’s mental health bond — and at least a dozen others in November. Competing interests could easily spend a quarter-billion dollars to persuade voters.

Interestingly — and perhaps sadly — none of them will materially affect the aforementioned existential issues that have come to define California in the 21st century. The chances are quite strong that when Californians look back on 2024 a year hence, those issues will be as depressing as ever.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times. CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more columns by Dan Walters, go to calmatters.org/commentary.

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Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He has written more than 9,000 columns about the state and its politics and is the founding editor of the “California Political Almanac.” Dan has also been a frequent guest on national television news shows, commenting on California issues and policies.

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