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California's Budget: A Surprising Turnaround

Californias finance director, Joe Stephenshaw, delivered an optimistic budget outlook, revealing a modest $2.9 billion shortfall instead of the anticipated massive deficit. The surplus was attributed to a $42.3 billion jump in revenues, primarily from personal income taxes. This contrasts with the Legislative Analysts Office forecast of up to $18 billion in red ink. Stephenshaws optimism is based on not incorporating risks like stock market downturns or recessions into their projections. Republican Senator Roger Niello warned against proposing no cuts, citing past budgets based on sunnier assumptions that often missed the mark. The budget includes rising costs from federal budget, such as $1.4 billion for Medi-Cal and $300 million for CalFresh in 2027. However, no new one-time funds were pledged for homelessness, drawing criticism from advocates. Stephenshaw advised caution due to federal volatility, and lawmakers will revisit the budget in the May revision, keeping spending tight for now. Checkout Solipillow.com

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