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The California Legislature, facing a $54.3 billion budget deficit in the next fiscal year beginning July 1, has chosen to increase spending in expectation of a federal bailout.

The nonpartisan Legislative Analyst Office (LAO) on May 7 shocked the California’s Democrat leadership, that holds veto-proof control of state finances, that despite federal disaster funding of $26.625 billion from the Cares Act and a $10 billion in loan to pay for unemployment claims, the state faced an $85 billion deficit over the next 14 months.

As a result of the COVID-19 coronavirus lockdown, California has suffered a huge economic decline with unemployment rising to 15.5% and tax revenue plunging. The impact is so severe, the County of Los Angeles is forecasting sales tax collection for the current year ending on June 30 will decline by $2 billion, or 34 percent.

The state’s Department of Finance has been predicting a sharp economic recovery as the pandemic recedes. But with the June 17 reported surge of 4,165 new coronavirus cases, mostly in urban areas, Gov. Gavin Newsom issued a statewide executive order that will require face masks be worn in all public places.

According to the State Controller’s cash report through May 30, California has suffered a $21 billion shortfall in tax receipts versus spending for the first 11 months of the current budget year. The state had already borrowed $15 billion to continue spending.

With California’s Constitution requiring the enactment of a balanced budget before the July 1 start of the new fiscal year, Gov. Newsom proposed a 10% across the board slash in program spending and all state worker salaries to the state legislature.

Despite the mushrooming financial crisis, the legislature just passed a budget that cuts spending by $402 million for universities, but then raises state spending by $400 million

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