You’re right for cities and counties (and the state itself) in California. None are allowed to operate at a deficit, hence the creation of the state “rainy day

You’re right for cities and counties (and the state itself) in California. None are allowed to operate at a deficit, hence the creation of the state “rainy day fund” by Gov. Brown after the 2008 recession which has worked very well in tempering the current fiscal issues in the Covid pandemic, at least at the state level.