California Governor’s Budget is Structurally Balanced

Fitch Ratings Describes Governor Newsom’s Budget as “Structurally Balanced” and “Maintaining Budgetary Resilience”

SACRAMENTO, CA (STL.News) Fitch Ratings, one of the world’s top credit ratings agencies, has determined that Governor Gavin Newsom’s proposed budget is “structurally balanced” while investing in some of the state’s most pressing challenges.

Here are some of the top takeaways:

  • “the governor takes a fairly conservative approach to using increased revenue by limiting growth in ongoing spending, rebuilding reserves, and paying down long-term liabilities”
  • The budget “reflects the continued economic and revenue rebound from the pandemic and continues the state’s policy of prudently allocating higher available revenue to maintaining budgetary resilience while also increasing programmatic spending”
  • “The budget as initially proposed in January and revised in May provided approximately a $3 billion increase in ongoing spending, including to expand access to healthcare, address extreme weather, invest in public safety, and combat homelessness.”
  • “Even with these increases, the multi-year forecast, … is structurally balanced.”