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Despite surplus, analyst warns of California 'fiscal cliff'

Gavin Newsom
Posted at 3:06 PM, May 16, 2022
and last updated 2022-05-16 18:06:38-04

SACRAMENTO, Calif. (AP) — California's nonpartisan legislative analyst says the state could be headed toward a fiscal cliff despite a record-breaking budget surplus.

Gov. Gavin Newsom announced a $97.5 billion surplus on Friday.

The Legislative Analyst's Office said Monday that Newsom's proposal would leave the state about $25 billion over a constitutional spending limit next year.

The analyst said that could require budget cuts.

California Department of Finance spokesman H.D. Palmer noted Newsom's budget proposal leaves the state in a good position to handle the problem.

California would have billions of dollars in reserve. And he said the state could cut back on one-time spending if necessary.