Newsom announces $32 billion budget deficit in California a year after $97 billion surplus

California Gov. Gavin Newsom revealed the state’s budget deficit is $10 billion higher than he had predicted back in January. He said it has grown to $32 billion.

"We have a $31.5 billion challenge, which is well within the margin of expectation and well within our capacity to address," Newsom said Friday.

California has the largest state budget in the nation at $306 billion, according to Fox News, and is one of the few states to have a deficit this year. "Some say it is due in part to a progressive tax code that relies on wealthy taxpayers whose income is closely tied to the performance of the stock market," according to the outlet. The loss of Elon Musk alone and a significant part of Tesla to Texas has cost California more than $2 billion, with other estimates being several times that.

Newsom has talked about different ways to cover the deficit, including $9.6 billion in spending cuts, clawing back unspent funds from various programs, shifting expenses and borrowing.

"This was not an easy budget, but I hope you see we will try to do our best to hold the line and take care of the most vulnerable and most needy but still maintain prudence," Newsom said.

Republicans in California see it a bit differently. "His cuts to drought programs are dangerous, his 'fiscal gimmicks' are shortsighted and his words about good government and efficiency are yet another empty promise. Californians deserve better," said Republican Assembly Leader James Gallagher in a statement.   

It was just about a year ago that Newsom had touted a budget surplus of $97 billion and called it "simply without precedent."

And it was just about a week ago that a committee established by Newsom had recommended reparation payments to blacks in California "to make amends for slavery that could cost the state billions if approved by the legislature," according to Fox News.

Since that recommendation was announced, Newsom has waffled on whether or not he supports the idea of cash reparations to Californians as a response to slavery, though California was never a slave state.