California's Record $68 Billion Budget Deficit: A Harsh Economic Reality for Newsom

California is facing a record $68 billion budget deficit, primarily due to lower than expected tax revenues. The state delayed its tax filing deadline, leaving Democratic Governor Gavin Newsom to create a spending plan without knowing the available funds. The deficit could lead to spending cuts in education and withdrawals from the state's savings account. The problem is attributed to inflation and the Federal Reserve's efforts to control it, resulting in increased borrowing costs and reduced economic activity. Layoffs, particularly in the tech sector, have contributed to a rise in unemployment. California's revenues, which had surged during the pandemic, have now declined, leading to consecutive years of budget deficits.