California Has Lost A Greater Share Of Revenue Than Most States Due To COVID-19

Capital Public Radio | By Nicole Nixon / CapRadio

Published August 3, 2020 at 7:12 AM EDT

This story is part of an NPR nationwide analysis of states' revenue and budgets during the pandemic.

California's progressive tax structure means state revenue does well in good economic times but suffers more than most other states when there's a downturn.

In January, California was projecting a $5.6 billion surplus, but the pandemic quickly transformed that into a $54 billion deficit. The Golden State tried a little bit of everything to help stanch the fiscal bleeding: lawmakers canceled new spending, drew from the state's rainy-day fund and limited tax breaks for large and medium-sized businesses.

Democratic Gov. Gavin Newsom also is asking for up to $14 billion in aid from Congress, arguing that "the federal government has a moral, ethical and economic obligation to help support the states."

But if that relief doesn't come through, it would mean furloughs for state workers and slashed funding for state universities and courts. It would also mean a total of more than $12 billion in deferred payments to K-12 school districts and community colleges, which would have to front those costs for now and hope the state can afford to pay them back next year.

Nicole Nixon is a politics reporter for CapRadio in Sacramento, Calif.