California’s Tax Revenues Fall Short, Multi-Billion-Dollar Deficit Widening: Legislative Analyst

Tax collections for 2022 in California fell well short of expectations, contributing to a $26 billion budget deficit for fiscal year 2023–2024, which is expected to increase to $58 billion through 2025, according to the state’s nonpartisan Legislative Analyst’s Office.
A “severe revenue decline” of 25 percent from the prior year, the decrease in tax collections is second only to the nearly 29 percent drop in 2002 following the dotcom bust, according to state tax collection data.
The tax collection shortfall for 2022 contributes to a $26 billion deficit for fiscal year 2023–24, which is expected to grow to $58 billion through 2025.
“The full extent of revenue weakness … came into full focus recently with the arrival of the postponed tax payments,” analysts wrote in a Dec. 1 report. “While the slowdown of investment in California companies and corresponding broader economic weakness likely was a primary driver of this decline, another important factor was financial market distress in 2022.”…