Coronavirus outbreak threatens to wipe out California’s $21-billion surplus

Coronavirus
Gov. Gavin Newsom speaks at a news conference in Sacramento on Feb. 27, 2020. (Credit: Justin Sullivan / Getty Images)

Gov. Gavin Newsom speaks at a news conference in Sacramento on Feb. 27, 2020. (Credit: Justin Sullivan / Getty Images)

For more than six years, through two governors and hundreds of lawmakers’ votes, California’s state government slowly built the largest cash reserve in its history — projected to total $21 billion by next summer.

But there are growing fears that the fast-moving crisis sparked by the coronavirus pandemic could force it to be spent in a matter of months.

A number of the state’s most experienced budget watchers now expect that California might need to use the entire cash surplus, and possibly much more money, to prop up vital government services that could be severely underfunded by a quickly collapsing economy.

“This is a sudden downturn unlike anything we’ve seen,” said Gabriel Petek, the state’s legislative analyst. “We’re kind of flying blind at this point.”

Read the full story on LATimes.com.

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