California cities and schools face severe budget deficits

California is facing significant budget deficits at both the state and local levels. The state has a structural deficit, with revenues failing to meet mandated spending. This situation has been worsened by an inaccurate revenue forecast and a sluggish economy. Major cities like Los Angeles and San Francisco are also struggling. Los Angeles is projected to overspend by $300 million, while San Francisco's new mayor aims to cut $1 billion in overspending to address an $876 million deficit. Smaller cities are similarly affected. School districts are facing budget gaps due to declining enrollment and the end of federal COVID-19 aid. Local officials may consider tax increases, but rising living costs make this unlikely. They must choose between significant spending cuts or adopting temporary financial fixes.