California Deficit Grows to $16 Billion

The state budget deficit in California has soared since the beginning of the year, and is now projected to be $16 billion, a dramatic increase from the $9.2 billion that had been expected in January, Gov. Jerry Brown said in a video posted on YouTube Saturday (embedded below).

“We will have to go much further, and make cuts far greater, than I asked for at the beginning of the year,” Brown said. The announcement marks “a significant setback for Brown,” particularly since he had promised to get the state’s finances in order when he was elected, notes the Los Angeles Times.

In the YouTube video that, as the New York Times notes, “had all the trappings of a campaign announcement,” Brown called on state voters to back his initiatives to increase the sales tax by a quarter-cent and boost income taxes for those who make more than $250,000 as a way of preventing deep cuts in essential services. Brown will outline his spending plan Monday to state lawmakers.  

The governor said the budget deficit was larger because tax collections have fallen short of expectations and the economy is taking longer to recover, reports the Associated Press. Brown also blamed the federal government and the courts for preventing billions in cuts. Now he may be crossing his fingers that Facebook’s initial public offering is successful. Reuters points out the Golden State could receive lots of cash from the IPO, with revenues from Facebook stock options held by people living in California expected to reach as much as $2 billion.