State budget shortfalls
California faces an ~$18B shortfall for 2026-27, with structural deficits potentially reaching ~$35B annually as spending outpaces volatile revenue from high earners and capital gains. Rainy Day Fund use, federal cuts to Medi-Cal and CalFresh, and debates over taxes, cuts, or backfills are central to the next governor’s inheritance.
Where do you stand?
How should California handle its multi-year budget shortfalls and structural deficits?
How important is this to you?
✓ You told us where you stand
Sources
Legislative Analyst's Office — https://lao.ca.gov/Publications/Report/5091
The state faces multi-year budget problems: an ~$18B shortfall projected for 2026-27 (larger than earlier estimates), with structural deficits potentially growing to ~$35B annually as spending outpaces revenue growth.
https://prostateaffairs.com/ca/politics/california-political-issues-2026
Compounded by federal funding cuts (e.g., to Medi-Cal/Medicaid and CalFresh/nutrition assistance under recent federal actions), leading to debates over state backfills, cuts, premiums/work requirements, taxes (including corporate or billionaire-focused proposals), and spending priorities
Positions on this issue · liberal → conservative
- Raise taxes on corporations and billionaires to fully backfill cuts and protect health/education spending
- Use targeted new revenue and Rainy Day funds to preserve core services while trimming lower priorities
- Balance modest revenue measures, efficiency reforms, and prioritized spending reductions
- Avoid new taxes; draw reserves sparingly and make deeper cuts to align spending with revenue
- Slash spending significantly, reject tax hikes, and shrink government to eliminate structural deficits