California Takes Extraordinary Measure To Make Payroll
Written by Chriss W. Street
MountainTopTimes
Jan 12, 2025

The State of California was forced to transfer another $18 billion from other funds to temporarily cover $23.3 billion in negative-cash-flow in the first six months of the 2024-25 fiscal yearthrough December 31, 2024.
The State of California received about $97 billion from the Biden Administration’s Covid-19 bailout. This allowed the state to run a record $70 billion total deficit for 2023-2024 fiscal year that ended in June 2024.
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Gov. Newsom’s introduced a budget in June of last year that was technically balanced, but only because he intended to cover huge amounts of deficit spending by draining the last of the state’s $3.7 billion in ‘Special Fund for Economic Uncertainties’ and $17.6 billion in the ‘Budget Stabilization Account.’ Due to higher spending, that cash was already drained by just five months of the year.
California personal income tax and corporate tax collections came in a big +$7.6 billion stronger than projected through December 2024, due mostly to the hot “Trump Bump” stock market generating huge one-time capital gains. But California spending was up at an even faster +$9.3 billion as shown belowin the California Controller’s revenue and spending report through December 31, 2024.
The vast majority of state spending increases are due to largeincreases in Health and Human Services spending. The Mountain Top Times has highlighted big state welfare and healthcare cost increases as a result of California adding at least 2 million illegal aliens since 2021.
California does have $94.6 billion of unused “borrowable resources,” but those potential loan funds are mandated federal grant dollars that must be paid back within 120 days and spent by the end of October 2025.
The Mountain Top Times reported on January 1, 2025 that California State Auditor Grant Parks noticed Governor Newsom and Legislature leaders that the Internal Control and Compliance Audit Report for the Fiscal Year Ended June 30, 2023 issued a qualified opinion. That means California’sfinancial statements cannot be relied upon as true and correctaccounting of the state’s income, spending and balance sheet.
All of this grim news was before the Los Angeles fires killed 16 people, destroyed 12,000 buildings, caused over $180 billion in damages, and are only 12% contained.
National Weather Service issued a new Fire Weather Watch this morning, predicting high pressure will generate 30-50 mphSanta Ana dry winds flowing west through the deserts into Southern California. The winds will moderate Sunday afternoonas the pressure gradient weakens, but accelerate to 65 mph Sunday night through Monday.
Over the next month, The Mountain Top Times will produce a series of reports on the accelerating California budget crisis.
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