California Governor Signs Budget Act, Declares Fiscal Emergency

With the state facing a significant budget deficit, California Gov. Gavin Newsom signed the Legislature’s budget act into law June 26 and issued a proclamation of a fiscal emergency—thus allowing the state to tap reserves to help cover the shortfall. “I have determined that estimated resources are inadequate to fund General Fund expenditures for the current or ensuing fiscal year, which constitutes a budget emergency,” Mr. Newsom said in the emergency declaration. The 2024–25 budget act, Assembly Bill 107, lays the groundwork for the fiscal year, which starts July 1. As per state law, the budget plan is balanced, with lawmakers agreeing to a combination of reductions, deferrals, delays, and borrowing....