Fact Check: California Is $1.6 Trillion In Debt, Budget Deficit Is $222 Billion

Recent reports have revealed California as a state burdened by unprecedented debt and a daunting budget deficit. Governor Gavin Newsom‘s proposed solution is Proposition 1, aimed at tackling homelessness and addiction.

Recent audits of the state’s financial statements, as of June 30, 2022, show that California is saddled with a debt of $1.6 trillion, a figure that includes both state and local government debts, alongside the state’s unfunded liabilities. This amount translates to approximately $125,000 of debt per California household, surpassing the GDP of all but 13 countries globally, according to Stanford University’s Hoover Institution.

And California’s debt does not bode well for the reparations movement there. Economists have estimated that reparations could cost California at least $800 billion to address the repercussions of generations of over-policing, disproportionate incarceration, and housing discrimination experienced by Black residents, PBS reported.

Since February 2020, California has witnessed a stark decline in job numbers, with a loss of roughly 366,000 jobs compared to a nationwide gain of 5.4 million jobs during the same period.

Despite enjoying $18.8 billion in revenues exceeding expenditures, California grappled with a nearly $40 billion increase in liabilities. These liabilities, attributed to funds owed to other governments and tax overpayments, significantly offset the surplus. Consequently, the state now finds itself with a whopping $222 billion unrestricted net deficit, the largest among all states in the nation. Only three states—Alaska, South Carolina, and California—witnessed a worsening of their balance sheets, The Epoch Times reported.

Governor Newsom has proposed Proposition 1, a $6.38 billion bond initiative aimed at addressing homelessness and addiction by funding the construction of treatment facilities and permanent housing. Chronic homelessness in California has increased to about 70,000, and the total number of homeless individuals has increased from about 115,000 in 2015 to about 181,000, according to the Hoover Institution.

Governor Gavin Newsom, photo via Instagram.