Gov. Newsom Blames State’s Massive Deficit on ‘Rain Bombs’ and ‘Climate Change’

Reporter: “Can we explain to Californians how we moved from $100 billion surplus to such a significant deficit in just a matter of a few years?”
Newsom: “Well, it’s — yeah, we can explain it. Through $149 billion of unprecedent capital gains, 11.6 percent, when traditional capital gains is around 5.18 percent, on average. So it’s almost double. So you have massive volatility. You have requirements under Prop 2, the Gann, you have requirements under Prop 98, which require that set aside, we use 93 percent of our surplus, which is I want to be careful, either on the higher end or without precedent, for one-time purposes. So we anticipated because we didn’t want that surplus to go to ongoing commitments, we anticipated that shortfall. 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. And so therein lied this blackout period that beguiled all of us, the LAO finance economist experts. And interestingly, I mean, there’s been at the White House recently, had an impact in terms of the IRS collections as well, with their estimates because there were other states that had similar delays and their taxes related to weather events. If there was any indication that climate change has impacts well beyond those that are often promoted, I would consider our financial delays as just another example of why we need to tackle them, another reason I’m looking forward to conversations that we will have next week.”