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California doom: Staggering $54 billion budget deficit looms

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Posted at 9:27 AM, May 07, 2020
and last updated 2020-05-07 12:27:59-04

SACRAMENTO, Calif. (AP) -- New estimates from California Gov. Gavin Newsom's administration predict a staggering budget shortfall of $54.3 billion because of the coronavirus.

The projections released Thursday estimate a deficit nearly three-and-a-half times more than what the state had saved for an economic downturn.

California has been under a mandatory stay-at-home order since March 19. The order closed nonessential businesses and prompted more than 4 million people to file for unemployment benefits.

A year ago, as the economy hummed, California had a $21 billion surplus. Now, there will be dramatically less money to spend on education, social programs and other programs.

Newsom plans to reveal a new budget proposal next week.