Bloomberg Tax
May 7, 2020, 7:45 PM

California Sees Surplus Evaporate With $54 Billion Shortfall (2)

Romy Varghese
Romy Varghese
Bloomberg News

California is projecting a $54 billion budget deficit through June 2021 as surging unemployment caused by the pandemic-related shutdowns slams the economy of the most populous U.S. state.

The size of the shortfall, equivalent to roughly one third of its annual general-fund spending, marks a stunning reversal for a state that in January was expecting to build up its rainy-day fund to more than $18 billion and was considering new services, such as for children’s education and the homeless.

Instead, state officials are seeing major sources of revenue plummet with the unemployment rate expected to reach 18%. Personal income-tax collections ...

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