The Brief

With tax revenues in a free fall comparable to the Great Recession and the dot-com bust, California faces a projected $68 billion budget deficit next year that will require spending cuts and reserve funds to close, state finance officials said today.

The new estimate from the nonpartisan Legislative Analyst’s Office, released as Gov. Gavin Newsom finalizes his January budget proposal, reflects a substantially delayed tax-filing period this fall where collections came in far below what lawmakers expected when they adopted a spending plan over the summer.

This projected deficit would be a record for California. But officials noted that it is partly because the budget has grown so much in recent years — the most recent was more than $300 billion — and that the state has closed similar or worse spending gaps, by percentage, in the past.

Legislative analyst Gabriel Petek cautioned that California is better prepared to respond to the situation than during the economic recession 15 years ago, because it has since built several multibillion-dollar rainy-day funds, though the state is also looking at a structural deficit of about $30 billion annually going forward.

“I go with the word ‘serious.’ A serious budget problem,” Petek said during a briefing with journalists. “I would stop short of calling it a crisis.”

H.D. Palmer, a spokesperson for Newsom’s Department of Finance, said the administration will have different numbers when the governor presents his 2024-25 spending plan next month, but Newsom is preparing to address a significant deficit.

“Both the Governor and the Legislature have a substantial challenge before them in closing a very large revenue gap in this budget,” Palmer told CalMatters. “The IRS, with the best of intentions, created a situation this year that is entirely new territory.”

Severe winter storms prompted the federal government to delay the income tax filing deadline for most Californians from April until November, and the state followed suit, giving an incomplete picture when legislators and the governor crafted the budget this summer.

It already accounted for a $30 billion deficit, after two years of record surpluses driven by economic recovery and federal aid related to the coronavirus pandemic. But those collections were ultimately another $26 billion below estimates — a drop of 25% from the prior year — digging a financial hole based on money the state committed in its spending plan.

This year looks weak as well, according to finance officials. California has been hit particularly hard by inflation, which pinched the housing market; a stock market downturn, affecting capital gains; and a drop in investments in the tech industry, which has pulled back on initial public offerings. Overall tax revenues are projected to be $58 billion below assumptions in the multi-year budget window.

Though the Legislative Analyst’s Office estimates that tax revenues will begin growing again next year, the recovery is likely to be slow, opening up long-term funding shortfalls that could affect essential programs in future years.

“There are enough options available to address this immediate problem,” Petek said. “Our high-level suggestion to the Legislature is just to be judicious about reserves because there’s a lot of uncertainty ahead, so preserving some of that resilience would be helpful.”

His office recommended that Newsom declare a fiscal emergency, allowing the state to dip into as much as $24 billion of its rainy-day funds, and that legislators pull back on one-time spending allocations that have not yet been distributed, potentially saving $10 billion or more that had previously been set aside for transportation, environmental and education programs.

Petek also suggested that California could cut the deficit by nearly $17 billion over the next three years by recalculating its constitutionally-mandated funding obligation to schools and community colleges, known as Proposition 98, based on the lower revenues. Though this would decrease the state’s base education funding over the long term, Petek said the immediate effects could be offset with reserves.

That option, in particular, could encounter stiff resistance in the Legislature. Assembly Speaker Robert Rivas, a Hollister Democrat, released a statement last week, when it became clear that tax revenues would be substantially below estimates, committing to a budget that “protects classroom funding.”

Newsom and lawmakers are also likely to confront months of tremendous pressure from advocates arguing that their priorities should be protected in any budget solutions. Statements started rolling out mere minutes after the Legislative Analyst’s Office published its report.

“California leaders have stepped up before to prioritize Californians who are struggling to get by and they must continue this in 2024,” said Pete Manzo, president & CEO of United Ways of California.

Republican legislators chastised their Democratic colleagues for continuing to make new spending commitments in recent budget cycles even as it became clear that the economy was increasingly shaky.

“Hopefully, the supermajority will see it is time for a more realistic budget strategy,” Senate Republican Leader Brian Jones of San Diego said in a statement, “instead of throwing money at a laundry list of projects that sounds nice on the national television debate stage.”

Lineage has said it is racing to meet Mayor Karen Bass’ 45-day deadline to remove millions of pounds of spoiled food waste from the burned warehouse in Boyle Heights. That date is fast approaching on Aug 14. Here’s where things stand as we’re more than halfway through. 

Cleanup progress

• As of July 20, Lineage has removed approximately 3,520 tons or 7 million pounds of food and building debris. 
• An estimated 3,195 tons or 6.4 million pounds of that total is food waste that has been removed from inside the building. (Before the fire, the warehouse stored approximately 44,000 tons, aka 88 million pounds, of food inside.)
• To date, 56% percent of the damaged roof has been removed, according to L.A. County Public Works.
• This week, Lineage said it increased the number of trucks removing debris from the site.

What’s left to clean up? 

• It’s unclear how much food waste and debris are still left to clean up, but an aerial image of the building from Lineage shows that almost half of the building has been torn down and cleared. 
• At Tuesday’s L.A. County Board of Supervisors meeting, Leslie Luke, deputy director for the county’s Office of Emergency Management, said Lineage is now working to tear down a concrete wall that separates “Freezer 1,” which burned in the fire, and “Freezer 2.”
  
  • “… by doing so they’ll be able to get to Freezer 2 and rows of product in there. Each one of the rows is about the size of two football fields, and there are about 28 rows in that second freezer,” Luke said.

Odor mitigation

• Residents continue to report strong odors emanating from the warehouse. 
• On Friday, July 17, the South Coast Air Quality Management District (South Coast AQMD) issued a formal demand letter requiring Lineage to strengthen its Odor Management Plan after receiving over 900 odor complaints.
• This week, Lineage responded to the letter and said:
  
  • They have implemented misting systems to mitigate odor around the building.
  • Food waste is being sprayed down with odor control, bleach and water.
  • Food waste from Building 2 will be sprayed down with a Posi-Lock odor containment system, but the contents of Building 1 are too wet to do so.  
  • They have wrapped the entire building in plastic sheeting and will repair or replace any that becomes damaged or worn within 72 hours.
  • They are unable to wrap the food being removed from Building 1, as it would add months to the cleanup process.
  • The full response from Lineage is available here.
• To report the odor call 1-800-CUT-SMOG, file a report online at aqmd.gov/complaints or download the free South Coast AQMD mobile app to submit complaints from your phone.

LA Documenter Julania Marechal-Raymond contributed reporting for this story. LA Documenters trains and pays LA residents to take notes at local government meetings around Los Angeles. You can find meeting notes and audio at losangeles.documenters.org

This story appeared first on LA Local.

The Los Angeles Metro Board voted unanimously Thursday to move forward with a plan that would create the first-ever seat for a regular transit rider on the agency’s governing board. Such a plan would need state approval before it becomes final.

Janice Hahn, an L.A. County supervisor and Metro Board member, introduced the motion.

Another motion put forward by L.A. Mayor Karen Bass passed on a 12-1 vote. That motion would also reserve a seat — one of the L.A. mayor’s three appointees — for a rider or rider advocate. Both rider seats would have voting power. The make up of the rest of the board would largely remain the same, although members asked Metro staff to further study adding a labor representative.

The L.A. Metro Board has an annual budget of nearly $10 billion and facilitates countywide transportation projects.

Earlier this year, a Metro committee began debating the future composition of its board. The discussion was prompted by Measure G, the voter-approved initiative that will expand the county Board of Supervisors from five to nine members, and add a position for an elected countywide executive.

Five of the Metro Board’s 13 voting seats are reserved for county supervisors. Bass’ motion maintains the five county seats and will leave it up to the Board of Supervisors to decide who, including the county executive, will have a seat on the Metro Board.

Lindsey Horvath, an L.A. County supervisor and Metro board member, cast the lone dissenting vote Thursday on Bass’ motion. Horvath said she supports the inclusion of a rider voice on the board, but had campaigned for a designated seat for the county executive.

“ The county executive will be the only elected seat to represent the entire county of Los Angeles,” Horvath told LAist before Thursday’s vote. “For that position to not be at the decision-making table on something as critical as transit solutions for the region ... makes absolutely no sense.”

The make up of the Metro Board is codified in the state’s public utilities code, so any proposed changes approved on Thursday will need another vote by legislators in Sacramento before they become official.

WASHINGTON (AP) — President Donald Trump feted Shohei Ohtani, Freddie Freeman and the World Series champion Los Angeles Dodgers at the White House on Thursday, calling the team “one of the great brands anywhere in the world” during a Rose Garden event celebrating its second title in as many years.

Trump said the Dodgers edging the Toronto Blue Jays in Game 7 last fall capped “a hell of a series.” He indicated he was surprised to learn that the Dodgers had never before won consecutive titles but also mused about a third in a row.

“I’m thrilled to say welcome back to the White House,” he said. “And maybe I’ll see you again next year.”

The president saluted the team in the East Room in April 2025 to mark their 2024 World Series championship over the New York Yankees. He said before the latest event that he was most excited about meeting Ohtani, whom he compared at length to the legendary Babe Ruth — even saying the Dodgers star was arguably the best hitter and pitcher in baseball.

“It’s truly a great — when you talk about a brand — it’s one of the great brands anywhere in the world,” Trump said of the Dodgers. He spoke in front of a table with two World Series trophies and a Trump 47 jersey, which the team presented to him.

The Dodgers also gave Trump what looked like a replica of a World Series ring. That prompted Trump to exclaim: “Wow. Do I have to report this? I don’t want to report this” before slipping the ring into the inside pocket of his suit jacket.

Trump says Iran war has kept him from following baseball closely

Those in the crowd wore blue Dodgers caps to guard against bright overhead sun, and the band played a jazzy instrumental version of Randy Newman’s “I Love LA” before Trump took the stage.

Trump described last year’s World Series’ epic Game 3 during which the Dodgers won 6-5 in 18 innings. Trump said he stayed up until around 3 a.m. to watch, noting that “it was a long one, but it was amazing.”

President Donald Trump shakes hands with Los Angeles Dodgers Shohei Ohtani.

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Alex Brandon

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AP

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“I thought it was a game that you were going to lose about four or five times, and you ended up winning,” he said, adding, “Luck is OK, too, right?” Dodgers manager Dave Roberts agreed: “Luck is OK.”

“But with talent you get a lot of luck,” Trump continued.

The president said he spoke briefly with Roberts before the event and learned that his team currently has the best record in baseball, noting, “I’ve been a little busy with Iran and some other things.”

That was his only reference during the event to fighting in the Middle East, which has escalated on both sides in recent days.

Roberts also spoke briefly, saying, “We’re going for a three-peat.”

Championship baseball teams have been coming to the White House since 1869, when President Ulysses S. Grant hosted the Cincinnati Red Stockings. They were the first fully professional team to visit the White House and went undefeated that season, though the World Series wasn’t established in its modern form until 1903.

Sports teams’ visits to the Trump White House have sometimes been a source of controversy. In 2018, the president rescinded an invitation to the Super Bowl champion Philadelphia Eagles after many players suggested they might skip such a trip.

Dodgers star right fielder Mookie Betts wasn’t at Thursday’s Rose Garden event, though he did make the 2025 visit. He said he prefers to spend the team’s scheduled days off with his family.

The Dodgers originally considered coming to the White House this past April during a series with the Washington Nationals, but a crowded early season schedule didn’t permit that. Instead, they’re in the nation’s capital during the off-day between a just-completed series against the Philadelphia Phillies and Friday’s opener against the New York Mets in Queens.

The White House has changed since the Dodgers’ last visit

Over the past year, Trump has revamped the Rose Garden and added a patio area reminiscent of his Mar-a-Lago club in Florida. At Thursday’s event for the Dodgers, he referenced the “ Walk of Fame ” installed on the colonnade, which features plaques of past presidents along with partisan insults against Joe Biden and other Democrats.

“I could put some of the great Dodgers on the wall,” Trump joked, “but I figured maybe it’s more appropriate that we put the presidents.”

Trump, a baseball fan and New York native, has for years been closely associated with the Yankees, whose late, longtime owner George Steinbrenner was a close friend. Trump referenced Steinbrenner on Thursday, saying, “He would do anything to win” before telling the Dodgers’ team owners, “But you’re doing the same thing.”

The president isn’t always so complimentary of teams, though. During a rally in Georgia on Wednesday, he praised the ownership of the local Atlanta Braves and slammed the Mets for their sky-high payroll and losing record.

Trump was joined on stage during that event by former Braves manager Brian Snitker, and Mike Plant, president and CEO of the Braves Development Company.

”You know, the Mets have the highest salary in baseball, and they lose all the time,” Trump said then. "And I’m like, maybe we can steal this guy.”

“There are teams like that, where they never go down,” Trump said. “Then you have other teams — ‘We’re rebuilding.’ They’ve been rebuilding for years. I don’t want to mention teams ’cause I know all the owners. They’re all friends of mine.”

LOS ANGELES (AP) — Republican Steve Hilton launched his general election campaign for California governor Wednesday with a gambit to win over left-leaning voters who dominate the state: Even if they loathe President Donald Trump, he said, they should consider voting for him.

During an event in Los Angeles, against the backdrop of a stinking, scorched food warehouse he described as a symbol of the state’s political incompetence, Hilton rolled out a list of campaign promises clearly aimed at residents buckling under California’s notoriously high cost of living. He vowed to bring the price of gasoline down to $3 a gallon, about half the current cost, cut residents’ utility bills in half, now among the nation’s highest, and eliminate state income taxes on the first $150,000 in earnings.

He blamed the state’s problems — from homelessness to low student test scores — squarely on Democrats, who hold every statewide office and supermajorities in the Legislature. He called Democrats a “rotten regime that has abandoned the working class.”

In his campaign remarks and ads he took out in leading newspapers throughout the state, Hilton addressed his relationship with Trump, who has endorsed him in the race.

“This is not about who you hate in Washington. It’s about what we love about California and what we can do to make California once again the best place anywhere in the country to start and raise a family, to start and run a business,” he said before a small group of supporters. “That’s what this election is about.”

Hilton’s maneuver is meant to create a sliver of distance from Trump without breaking from him. It’s a tacit nod to the political math in California, one of the nation’s most solidly Democratic states. Registered Republicans are outnumbered nearly 2-to-1 by Democratic voters, and a GOP candidate hasn’t won a statewide election since 2006.

Trump is widely unpopular in California outside his loyal conservative base. In 2016, Trump lost to Democrat Hillary Clinton by 30 points; in 2020, he lost to Joe Biden by 29 points; and in 2024, he lost to Kamala Harris by 20 points.

California is regarded as the home of the so-called Trump resistance, where Democrats have effectively used Trump as a foil in campaigns to motivate voters. Last year, Gov. Gavin Newsom essentially nationalized the state’s fight over Proposition 50, which recast U.S. House districts to favor Democrats, by framing it as a confrontation with Trump. The measure notched a 29-point win.

The campaign of Hilton’s Democratic opponent, former U.S. Health and Human Services Secretary Xavier Becerra, scoffed at the notion of Hilton being a change agent.

“Californians already know who Steve Hilton is: Trump’s puppet in California. His campaign is a promise to run our state the way Trump runs the country and we’re not buying it,” campaign spokesman Jonathan Underland said in a statement.

As for Hilton’s pitch that voters who dislike Trump should feel free to consider him in November, Underland said, “Steve Hilton cheers on a president whose illegal war has sent gas prices soaring and illegal tariffs have cost California families more than $2,500 this year alone. You can’t fix the affordability crisis while carrying water for the man causing it.”

In a heavily Democratic state, Hilton’s campaign is hoping his appeal to Democrats and independents will “give voters a permission slip” to look past the letter next to a candidate’s name, even in a nation deeply divided by partisanship.

“You do have a choice if you think that this state is going in the wrong direction,” he told supporters at a kickoff event in Boyle Heights, a Los Angeles neighborhood where residents have been complaining about the stench of rotting food, flies and rodents that followed a fire last month at a cold storage warehouse.

He was accompanied by Gloria Romero, a former Democratic state lawmaker who switched parties in 2024 and is this year’s Republican nominee for lieutenant governor. She delivered her own address in both English and Spanish, with supporters holding “Hilton-Romero” signs in the background.

Becerra, a former state lawmaker, congressman and state attorney general, is heavily favored to win the seat now held by Newsom, a likely 2028 Democratic presidential candidate who is barred by law from seeking a third term. Hilton and Becerra emerged from a chaotic primary election in June that had more than 50 candidates on the ballot.

The race is unfolding at a time when California is facing multiple crises. Despite billions in spending, homelessness remains widespread, especially in larger cities. Multibillion-dollar budget gaps are projected into the future. Home prices remain out of reach for many residents. The home insurance market is in disarray, businesses and residents have been fleeing the state, and residents contend with some of the nation’s highest gas prices, taxes and utility bills.

Making good on his campaign promises won’t be an easy task for Hilton, a former adviser to ex-United Kingdom Prime Minister David Cameron who has never held elective office. The governor doesn’t control the oil or utility markets, but Hilton says he will get rid of mandates, taxes and fees that drive those prices higher. He also would likely need the consent of a Legislature controlled by Democrats to change the state’s income tax structure.

Hilton crowned his campaign kickoff with a 30-second TV ad underscoring the financial challenges for many families.

“Life here has become impossible for anyone who isn’t already rich,” he says. “Let’s fix California.”