California is broke, but it’s not too late for the rest of us

California utilized to beryllium the spot wherever radical went to pursuit dreams. Today, it’s the spot wherever fiscal subject goes to die. The Golden State, which is location to Hollywood glitz, Silicon Valley billionaires and the highest authorities taxes successful America, is broke again. It's staring down different multibillion-dollar shortage that exposes conscionable however unstable and dysfunctional its fiscal exemplary has become. In short, the Golden State isn’t truthful aureate anymore. 

For years, politicians similar Democrat Gov. Gavin Newsom person insisted that California is the shining illustration of fiscal sensibility that America should follow. But erstwhile you peel backmost the layers, what you truly find is simply a authorities authorities that can’t halt spending, can’t program for the aboriginal and is present caught successful a structural fund situation of its ain making.  

The informing signs are flashing red 

This year, California’s nonpartisan Legislative Analyst’s Office (LAO) dropped a bombshell: the authorities is present projected to look an $18 cardinal shortage successful 2026–27, a shortfall $5 cardinal worse than what lawmakers admitted conscionable months earlier. Even much troubling, the LAO says California is facing structural deficits of $15 to $25 cardinal each twelvemonth done astatine slightest 2029.  

This isn’t a one-off situation for California. It’s a multiyear fund messiness that keeps getting deeper. And this is happening during beardown stock-market years erstwhile capital-gains taxation gross is already astatine grounds levels. Imagine what happens erstwhile the marketplace cools oregon erstwhile we deed a mild recession. 

DHS BLASTS NEWSOM OVER TAXPAYER-FUNDED HEALTHCARE FOR ILLEGALS AS CALIFORNIA AMBULANCE COSTS MAY SOAR 382%

California Gov. Gavin Newsom speaks astatine the 2025 New York Times DealBook Summit successful New York City connected Dec. 3, 2025. (Michael M. Santiago/Getty Images)

How did the authorities with the astir millionaires extremity up broke? 

California’s occupation is simple: 

• When the wealth comes in, politicians walk it.
• When the wealth slows down, they walk adjacent more.

Rather than tightening belts oregon prioritizing necessities, lawmakers person layered connected caller programs, expanded benefits and made semipermanent promises based connected impermanent gross spikes. Newsom and legislative leaders person hailed these expansions arsenic "investments," but the information is they are obligations that don’t vanish erstwhile the system dips. 

NEWSOM CALLS HOMELESSNESS AND POVERTY 'POSTER CHILD' OF CALIFORNIA'S FAILURES AS A STATE

Some of the biggest drivers of the fiscal situation include: 

• Massive increases successful Medi-Cal and safety-net programs, particularly expansions to undocumented residents, which analysts pass are increasing faster than the gross base.
• Billions spent annually connected homelessness programs with small measurable advancement arsenic homelessness soars successful large Californian cities.
• A reliance connected Silicon Valley taxation revenue, which swings wildly depending connected tech banal valuations and immoderate of these companies are relocating to much tax-favorable states.

City of San Francisco workers region a stateless encampment successful the Bayview vicinity successful San Francisco, connected Aug. 1, 2024. (David Paul Morris/Bloomberg via Getty Images)

• Costly backfilling of shrinking national funds, forcing California to enarthrosis much of its entitlement programs.

Instead of addressing these realities, politicians person spent years utilizing accounting gimmicks, money transfers, delayed payments and borrowing from peculiar accounts to disguise the reddish ink. The LAO present warns that these "one-time solutions" person mostly been exhausted. 

Newsom’s fund phantasy has deed reality 

Governor Newsom has spent years coating California arsenic a progressive Utopia that should beryllium a "model for America" that proves large authorities tin work. But you can’t telephone yourself the exemplary erstwhile you: 

• Run chronic deficits.

Rather than tightening belts oregon prioritizing necessities, lawmakers person layered connected caller programs, expanded benefits and made semipermanent promises based connected impermanent gross spikes. 

• Hollow retired your reserves.
• Can’t power spending.
• Depend connected a tiny radical of affluent taxpayers.
• Have the highest poorness complaint erstwhile adjusted for outgo of living.

California is present surviving paycheck to paycheck ironically, conscionable similar millions of Californians who can’t support up with the state’s affordability crisis.  

Meanwhile, different states are moving surpluses 

While California sinks deeper into reddish ink, fiscally disciplined states crossed the state are announcing surpluses, refunding taxpayers, oregon expanding reserves.  

• Texas, Florida and North Carolina all projected beardown surpluses oregon currency cushions.
• States with little taxes and leaner budgets like Utah, Tennessee and Idaho continue to transcend gross expectations.

In different words, the states that California politicians emotion to knock are the ones balancing their checkbooks. 

CLICK HERE FOR MORE FOX NEWS OPINION

This isn’t a one-off situation for California. It’s a multiyear fund messiness that keeps getting deeper. 

California’s exemplary is fool's gold 

A authorities with: 

• The biggest colonisation nonaccomplishment successful the country.
• The biggest stateless population.
• The highest taxes.

• And 1 of the largest structural deficits successful America

…should not be the model. 

CLICK HERE TO GET THE FOX NEWS APP

A functioning authorities indispensable beryllium capable to money its commitments responsibly, program for downturns and enactment the brakes connected erstwhile spending outruns revenue. California has failed to bash immoderate of that. 

California is not the exemplary for America. It’s the cautionary communicative for different states and our country. 

CLICK HERE TO READ MORE FROM TED JENKIN