Let’s fix this!
the California State Legislature faced a pivotal moment in our legislative process. One thing is clear: California is at a critical juncture.
Our current financial crisis, exacerbated by the policies of our current administration, demands immediate attention. While California boasts the fifth-largest economy globally, ominous signs point to future fiscal instability.
The reality is stark: this year California faced a staggering budget deficit, estimated to be $73 billion. The budget that was passed erased the deficit with a series of creative maneuvers to delay costs and borrow from the future, use rainy day fund reserves, and increase taxes. The deficit is not an isolated incident, but rather a symptom of deeper, long-standing structural issues that will create future budget deficits – unless the Governor and the Legislature face reality on what is driving the deficit.
For years, California’s economy has relied heavily on a narrow tax base, primarily sustained by the top one percent of high-income earners. But recent trends tell a concerning story. Small businesses, the backbone of our economy, are fleeing the state in droves. Between 2022 and 2023, 86,000 small businesses closed shop and left California, taking $20.4 billion in personal and corporate income tax revenue with them.
The exodus isn’t limited to small businesses. High and middle-income earners are also seeking greener pastures. In 2021 alone, we saw a net loss of another $20 billion in taxable income due to outmigration. California lost more residents than any other state in 2022, according to IRS data.
