Perspective: CA’s diminishing tech industry to blame for deficit

Unsurprising to most, Gov. Newsom just announced California’s deficit of $23 billion, in stark contrast to Texas (currently juggling an extra $33 billion). Marketplace’s Matt Levin breaks down how CA tech companies — which continue to flee the state in record numbers — are integral to the stock market and wealthy residents’ incomes.

This week, we learned the two most populous states in the country are in very different fiscal places right now. In California, Gov. Gavin Newsom is looking for ways to patch a $23 billion deficit. Meanwhile, in Texas, Gov. Greg Abbott is thinking up ways to spend a $33 billion surplus. 

You’re probably going to hear those numbers come up in a lot of blue-state-versus-red-state partisan bickering over the next few months. But this story is more about this economy than politics….

Most state budgets are kinda like your average household budget right now: Income is still rolling in and there’s still some leftover pandemic aid from the federal government, but it feels like a downturn may be coming. 

It’s already hit a very big part of California’s tax base, according to Chris Hoene at the California Budget & Policy Center. 

“Because we’re a heavy tech economy, it means tech has a disproportionate impact on the state’s revenues.”

This article originally appeared in Marketplace. Read the whole thing here.

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