California’s Major Deficit Problem
Early this year, reports indicated that California is in massive debt after two booming COVID-19 years. The nation’s most populous state and the fifth largest economy in the world has been struggling since last year as prices of goods and services rise.
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The state’s tax revenues have fallen shorter than expected, from technology investments leaving the state for cheaper places to the uptick in climate crisis across California.
California Collected Fewer Taxes
It is now much more expensive for people and businesses to borrow money, which means that fewer people are buying homes and fewer businesses are hiring workers.
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With unemployment high and more and more people leaving the state for better opportunities, fewer tax collections are being made for the state.
Storms Delayed Tax Collection
On top of that, a series of damaging storms last winter have made the problem worse for California. The storms were so bad that state officials decided to give Californians a break.
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The state gave people and businesses more time to pay their taxes this year, which means it had to create a budget without knowing how much money was available to spend.
Missing the Mark
It turns out that the state has missed its budget significantly. The nonpartisan Legislative Analyst Office said tax collections were off by $26 billion, a major driver of the deficit (via CBS News).
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Without knowing how much money the state had, California continued to fund programs that it could not afford. Now, the state is in a crisis.
“Rain Bombs” Are to Blame
Combined with the economic slowdown California has been facing, the deficit has caused a major headache for Newsom and his administration.
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To Newsom, the biggest contributor to this problem was the “rain bombs” that hit the state from December to March last year.
The Failure to Anticipate
“What we didn’t anticipate is these rain bombs in December, January, February, and March, these atmospheric rivers that led to a federal declaration that led to FEMA and the IRS moving in a direction where we couldn’t collect our taxes until, I believe November 16th, as opposed to April 15th,” Newsom told a reporter at a press conference on Friday (via Breitbart).
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This blackout led to a team coming together to predict what the budget would look like, yet they were not able to accurately predict what they would have to spend.
Every State Is Suffering from Extreme Weather
According to Newsom, California wasn’t the only state that had a budget affected by the storms that surged through the nation last year.
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“And so therein lies this blackout period that beguiled all of us the LAO, finance, economists, experts—and interestingly, I mean there been at the White House recently, [it] had an impact in terms of the IRS collections as well with their estimates because there were other states that had similar delays in their taxes related to weather events,” Newsom said.
Climate Change Is Affecting Financial Delays
The major problem behind this inability to accurately predict a state’s budget for the next year is not the oversight made by analysts but climate change.
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Newsom said, “If there is any indication that climate change impacts go well beyond what is often promoted, I consider our financial delays just another example of why we need to tackle them. This is another reason I’m looking forward to the conversations we will be having next week in this space.”
The Connection Between Climate Change and Storms
While scientists have not established a direct link between climate change and the storms California experienced last winter, there is something connecting climate change and extreme weather.
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Joao Teixeira, co-director of the Center for Climate Sciences at NASA’s Jet Propulsion Laboratory in Pasadena, California, and science team leader for the Atmospheric Infrared Sounder (AIRS) instrument on NASA’s Aqua satellite, says that there is no easy answer for why extreme weather has become so prevalent.
Still Learning the Cause Behind Extreme Weather
“Within the scientific community it’s a relatively well-accepted fact that as global temperatures increase, extreme precipitation will very likely increase as well,” Teixeria says (via NASA). “Beyond that, we’re still learning.”
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Right now, the available tools have pros and cons, says Teixeria, but the team is still researching the uptick in extreme weather affecting the entire world.
The Climate Change Crusader (Not Really)
Newsom, who has made climate change the priority of his time in office, will be traveling to Rome next week to deliver a speech at the Vatican on climate change.
Source: Office of the Governor of California/Wikimedia Commons
Unfortunately, people consider international jet travel a significant contributor to carbon emissions. However, Newsom will be traveling abroad regardless.