California Revenue Could Drop by $11 Billion More Than Forecast

California’s tax revenue could drop by $11 billion more than Governor Gavin Newsom projected in the event of an economic downturn, exacerbating deficit woes, the state’s nonpartisan budget adviser said.

The new forecast by the Legislative Analyst’s Office comes after Newsom on Friday forecast a $32 billion budget hole — $9.3 billion more than a January forecast — due to sharp drops in income for the state’s wealthiest residents who pay the bulk of income taxes.

Newsom proposed a $224.1 billion general-fund budget for the fiscal year starting July 1.

Gavin Newsom

Photographer: Justin Sullivan/Getty Images

The LAO report, released over the weekend, said Newsom’s ...