Stock Market Volatility Could Hurt California Budgets—But Experts Aren’t Worried

As stock markets tumbled over the past two trading days, the threat of continuing losses cast a cloud over California’s future budgets. However, this year’s record market highs could provide a safety net, according to experts. After the Dow Jones Industrial Average lost more than 1,000 points Aug. 5, the state’s Department of Finance said market volatility is not uncommon. “While we are monitoring these recent developments, volatility is a fact of life, and it has affected—and will continue to affect—state revenues, given the role that capital gains and other market-based activity continue to play in California’s personal income tax,” H.D. Palmer, deputy director for external affairs for the state’s finance department and principal spokesman on fiscal and financial issues for Gov. Gavin Newsom, told The Epoch Times via email....