7 ms·

California has more money than projected after admin miscalculated state budget

111 points by littlexsparkee 6mo ago

IvyMike 6mo ago
This but for government: https://www.reddit.com/r/gamedev/comments/z4meh0/game_designer_secretly_took_up_more_memory_than/ https://www.reddit.com/r/gamedev/comments/z4meh0/game_design...
tyre 6mo ago
A little “bank error in your favor” sitchu. We love to see it.
- snickerbockers 6mo ago
  "See what?" --Gavin
nxobject 6mo ago
If you want a vivid illustration (from an adjacent state) about the impact of pessimistic fiscal projections: Oregon has an infamous "kicker" law that refunds income taxes collected in excess of projections (plus a 2% margin). The state faces the same budgetary challenges as California... but can't project too pessimistically lest it leave money off the table.
- jaggederest 6mo ago
  Oregon's kicker law is a textbook example of bad economic policy, sadly. It essentially means that in boom years the state can't accumulate any general funds for recessions, which is half of the point of a state-level political entity in the first place. Balanced budgets and pay as you go are fabulous over the medium term, but over the short term of a year or two during a disaster or recession, governmental spending is critical as a counterbalance to reduced investment and general employment income.
  - jerlam 6mo ago
    California is also required to refund taxpayers if it accumulates too much revenue. The state's spending is capped at some limit set in 1979 with adjustments for inflation and population. https://calbudgetcenter.org/resources/qa-why-hitting-gann-limit-threatens-ongoing-investments-in-californians/ https://calbudgetcenter.org/resources/qa-why-hitting-gann-li...
  - tantalor 6mo ago
    Well maybe they should "project" a certain amount of revenue that goes to savings every year automatically, instead of waiting for a boom year windfall.
  - Supermancho 6mo ago
    > Oregon's kicker law is a textbook example of bad economic policy, sadly You must be talking about non-economic textbooks, otherwise this makes no sense.
    - lotsofpulp 6mo ago
      Oregon has a biennial budget, so some Oregon employee predicts how much money Oregon will earn over the next 2 to 3 years (which is basically impossible to do), and then Oregon leaders have to come up with a spending plan equal to or less than that revenue estimate. However, Oregon's costs have no relation to the revenue that the state predicted it would get, so it is constrains the solution space when unforeseen costs or cost trends happen. For example, Oregon predicts a certain amount of revenue, but gets 3% more than the predicted revenue, but that is because prices for everything went up 3% more than expected, now Oregon has less money than it needs to pay its expenses (since it has to return any revenue which was 2% over the estimate). Oregon is the only jurisdiction I have ever heard of with this kind of strict refund law, and its rigidity seems to be the main issue, along with the 2 year forecast requirement (since forecasting even 1 year is hard enough).
      - nxobject 6mo ago
        I appreciate you adding your experience here – I'm curious, just with the amount of knowledge you have of Oregon's fiscal oddities (e.g. biennial budgeting): are you an Oregonian yourself? I feel that I'm part of a sector of Oregonians that, because of our mini-recession and constant cuts, is suddenly having to learn about a lot of fiscal oddities that are finally catuching up with us. (e.g. how centralized education funding is, for example.)
sgc 6mo ago
Given that school budgets are absolutely gutted with mass layoffs this year and next, and the miscalculation looks like 2/3 of the budget shortfall, hiding such a basic and impactful error requires a much better explanation than I see in that article. It looks like it was done to stifle debate about budget allocations, which would be necessary in the circumstances.
- dmitrygr 6mo ago
  > Given that school budgets are absolutely gutted What now? https://edsource.org/2026/how-california-compares-to-other-states-in-per-student-spending/752906 https://edsource.org/2026/how-california-compares-to-other-s... https://educationdata.org/public-education-spending-statistics https://educationdata.org/public-education-spending-statisti...
  - idiotsecant 6mo ago
    Your own link says CA spends less than UNESCO’s 15.0% standard. Also, you could frame this in a much more information dense way by making an active claim about something instead of just spamming a bunch of links.
    - dmix 6mo ago
      A quick google search of the UNSECO target is "at least 15% of total public expenditure (or 4–6% of GDP)" and both the US (~5%) and California (~4-5% of gdp) already pass that criteria.
      - rayiner 6mo ago
        The UNESCO target is calibrated for developing countries. Few developed countries spend that much on non-tertiary education: https://www.oecd.org/en/data/indicators/public-spending-on-education.html https://www.oecd.org/en/data/indicators/public-spending-on-e.... Canada spends about 3.3%, less than California. (I think your numbers include tertiary education. My numbers are K-12 only. I’m not sure which of those the UNESCO target is based on.)
pclowes 6mo ago
This is wild. A mistake of this magnitude should result in several positions becoming vacant and many politicians being ineligible for any future offices. If a government can’t budget accurately everything else they do is likely even less competent. Every number and statistic they report should be treated with suspicion. Without clear data who is to say they are doing anything helpful at all?
- pclowes 6mo ago
  [flagged]
  - tyre 6mo ago
    Or! People understand that everyone makes mistakes and firing anyone who does only leads to people prioritizing hiding their mistakes vs. fixing them. It’s helpful, whenever you find yourself saying something like, “the only real explanation to me”, to think of a good faith version before assuming that the most cynical take is reality.
    - deleted 6mo ago
      [deleted]
    - bongoman37 6mo ago
      [dead]
    - pclowes 6mo ago
      I think there are mistakes and then there are mistakes. There is a point where the postmortem needs to stop being blameless. Getting things like this wrong is an existential risk to a important institution. We can’t be genuinely concerned about lost faith in institutions and also not hold them to the highest levels of accountability.
- dlcarrier 6mo ago
  The errors were all within the CalPERS pension fund. The pensions are guaranteed by the state, so the fund is notorious for a complete lack of fiduciary duty, and these types of errors track with the general quality of their operation.
noobahoi 6mo ago
[flagged]
codethief 6mo ago
Related: In the German state of Baden-Württemberg they were miscalculating the number of active teachers for 20 years due to a software error, causing the state to employ 1440 fewer teachers than actually intended. https://www.spiegel.de/panorama/bildung/baden-wuerttemberg-schwere-panne-1-440-unbesetzte-lehrerstellen-entdeckt-a-35c32d79-14e5-43d8-b0c9-1efa83eeeb9f https://www.spiegel.de/panorama/bildung/baden-wuerttemberg-s...
- NewJazz 6mo ago
  How is that related? That's a long term calculation error vs short term forecasting error.
  - RobRivera 6mo ago
    From my point of view, the Jedi are a state-funded militia coded as a tax exempt non profit!
    - unmole 6mo ago
      Why does tax exemption matter if they are state-funded?
boznz 6mo ago
Another indicator that the administration hasn't got a fucking clue what or where their (your) money goes.
seiferteric 6mo ago
Didn't something like this just happen last year (or year before) but in the opposite direction?
whalesalad 6mo ago
2 billion surplus? that's good for about 150 linear feet of high speed rail track in the middle of Salinas.
cdrnsf 6mo ago
Oops! They're still far easier to deal with than any federal agency.
testfoobar 6mo ago
Give it back?
hedgehog 6mo ago
The article doesn't really explain the overall budget, for scale it looks like in the 2025-2026 budget year CA planned to spend about $228B compared to $216B revenue ($227B in the previous year). https://ebudget.ca.gov/2025-26/pdf/Enacted/BudgetSummary/SummaryCharts.pdf https://ebudget.ca.gov/2025-26/pdf/Enacted/BudgetSummary/Sum...
tonymet 6mo ago
it’s less than 1% of the budget, and the state keeps overspending. Don’t get too optimistic
mlmonkey 6mo ago
> California's legislative leaders have known for months but did not make the issue public. Why would they give up a chance to make more money from the people? The government never misses an opportunity to pad its coffers. Reminds me of the CA State Parks department, which squirreled away millions of dollars and then was crying about lack of funding and hence wanted to shut down some parks.
- xp84 6mo ago
  Fun fact: I recently vacationed in Hawaii and couldn’t help but notice, despite groceries costing about 2x, gas there is a dollar cheaper than at home in California. California just can’t get enough tax money.
  - reducesuffering 6mo ago
    Not really a fact, more of a bad anecdote. Currently HI gas is just $0.17 cheaper than CA, and I see many CA gas stations at $5.09, just like HI. A decent chunk of that comes from strict CA low pollution refining, you know, to help you breath better... https://gasprices.aaa.com/state-gas-price-averages/ https://gasprices.aaa.com/state-gas-price-averages/
    - xp84 6mo ago
      5.09 - lol, ok maybe in the rural parts of the state or something. In L.A. it's $5.50 at the very cheapest stations (read: go out of your way and maybe waste 10 minutes waiting, then wait in line to pay cash) and even Bakersfield is about $5.25 minimum. $5.60-5.75 is what I see on most normal stations. The refining regulations are so great that they have succeeded in forcing nearly every refinery here to close now, so I guess gas prices can just go asymptotic, since California only allows this special unicorn gas, and I doubt any of these oil companies are going to open a new refinery in Arizona to make this special formulation, when they're closing the refineries here that used to make it. Maybe Sacramento can buy the closed refineries and restart them at great taxpayer expense and create our version of state-owned oil companies, except instead of printing money they'll be printing debt.
jjtheblunt 6mo ago
"Gov. Newsom in January projected the state would have to grapple with a $2.9 billion shortfall. The confirmed miscalculation means that shortfall could be much smaller." So, the title is just plain misleading. California is less in deficit than they earlier calculated.
- deleted 6mo ago
  [deleted]
dogscatstrees 6mo ago
They should have used Claude Code for Excel.
SilentM68 6mo ago
My Opinion: Anyone who thinks this is a glitch in the system, or an honest mistake, should shift their mindset and start thinking more like a detective and less like a politician. California has been steadily declining for years, now. Waste, mismanagement, fraud are commonplace. This needs to be investigated by impartial third parties that can't be bought and paid for whose commitment must be verified via polygraph. Those that are found guilty need to be prosecuted and jailed. Being that this is California, what will end up happening is that the politicians will end up investigating themselves and miraculously be found not liable. ****** Unbiased-AI Deep Dive: https://archive.ph/jdyO4 https://archive.ph/jdyO4
legitster 6mo ago
Correction: This is a correction to the forecast - not the budget. By the state's own admission, there could be as much as an $18 billion dollar budget deficit if the state economy fails to grow as projected. It could also be a smaller shortfall if the economy is even better than expected. Miscalculations are pretty common and this is why they are revised several times a year.
apparent 6mo ago
> "This isn’t a calculation error – it’s revision to better estimate how these payments are made," said H.D. Palmer, a spokesman for Newsom's Department of Finance. Nice excuse. Reminds me of "it depends what the meaning of 'is' is".
- hex4def6 6mo ago
  "The memo stated Gov. Newsom's administration made two errors. The first involved double counting CalPERS contribution rates for the upcoming year, which the LAO said was a $1.6 billion miscalculation. The second issue involved incorrect contribution rates when the administration calculated how much money the state would need to contribute to CalPERS in the years ahead. The LAO stated that mistake amounts to about $450 million. " ... "This isn’t a calculation error – it’s revision to better estimate how these payments are made," said H.D. Palmer, a spokesman for Newsom's Department of Finance. "We told legislative leaders and the LAO back in February that we would update how we estimate these payments once this issue was identified. We’ve already made that adjustment, and it will be reflected in the revised budget next month." Can someone please explain to me how double-counting isn't a calculation error? Best attempt wins. When a political organization has no qualms about putting out a statement like that, it's a sign that they do not respect you.
  - apparent 6mo ago
    Agree completely. You can say "it was this kind of error not that kind of error" but not "it's not an error it's a revision". They made a revision to fix the error.

111 points by littlexsparkee 6mo ago

This but for government: https://www.reddit.com/r/gamedev/comments/z4meh0/game_designer_secretly_took_up_more_memory_than/ https://www.reddit.com/r/gamedev/comments/z4meh0/game_design...

tyre 6mo ago

A little “bank error in your favor” sitchu. We love to see it.

snickerbockers 6mo ago
"See what?" --Gavin

nxobject 6mo ago

If you want a vivid illustration (from an adjacent state) about the impact of pessimistic fiscal projections: Oregon has an infamous "kicker" law that refunds income taxes collected in excess of projections (plus a 2% margin). The state faces the same budgetary challenges as California... but can't project too pessimistically lest it leave money off the table.

jaggederest 6mo ago
Oregon's kicker law is a textbook example of bad economic policy, sadly. It essentially means that in boom years the state can't accumulate any general funds for recessions, which is half of the point of a state-level political entity in the first place. Balanced budgets and pay as you go are fabulous over the medium term, but over the short term of a year or two during a disaster or recession, governmental spending is critical as a counterbalance to reduced investment and general employment income.
- jerlam 6mo ago
  California is also required to refund taxpayers if it accumulates too much revenue. The state's spending is capped at some limit set in 1979 with adjustments for inflation and population. https://calbudgetcenter.org/resources/qa-why-hitting-gann-limit-threatens-ongoing-investments-in-californians/ https://calbudgetcenter.org/resources/qa-why-hitting-gann-li...
- tantalor 6mo ago
  Well maybe they should "project" a certain amount of revenue that goes to savings every year automatically, instead of waiting for a boom year windfall.
- Supermancho 6mo ago
  > Oregon's kicker law is a textbook example of bad economic policy, sadly You must be talking about non-economic textbooks, otherwise this makes no sense.
  - lotsofpulp 6mo ago
    Oregon has a biennial budget, so some Oregon employee predicts how much money Oregon will earn over the next 2 to 3 years (which is basically impossible to do), and then Oregon leaders have to come up with a spending plan equal to or less than that revenue estimate. However, Oregon's costs have no relation to the revenue that the state predicted it would get, so it is constrains the solution space when unforeseen costs or cost trends happen. For example, Oregon predicts a certain amount of revenue, but gets 3% more than the predicted revenue, but that is because prices for everything went up 3% more than expected, now Oregon has less money than it needs to pay its expenses (since it has to return any revenue which was 2% over the estimate). Oregon is the only jurisdiction I have ever heard of with this kind of strict refund law, and its rigidity seems to be the main issue, along with the 2 year forecast requirement (since forecasting even 1 year is hard enough).
    - nxobject 6mo ago
      I appreciate you adding your experience here – I'm curious, just with the amount of knowledge you have of Oregon's fiscal oddities (e.g. biennial budgeting): are you an Oregonian yourself? I feel that I'm part of a sector of Oregonians that, because of our mini-recession and constant cuts, is suddenly having to learn about a lot of fiscal oddities that are finally catuching up with us. (e.g. how centralized education funding is, for example.)

sgc 6mo ago

Given that school budgets are absolutely gutted with mass layoffs this year and next, and the miscalculation looks like 2/3 of the budget shortfall, hiding such a basic and impactful error requires a much better explanation than I see in that article. It looks like it was done to stifle debate about budget allocations, which would be necessary in the circumstances.

dmitrygr 6mo ago
> Given that school budgets are absolutely gutted What now? https://edsource.org/2026/how-california-compares-to-other-states-in-per-student-spending/752906 https://edsource.org/2026/how-california-compares-to-other-s... https://educationdata.org/public-education-spending-statistics https://educationdata.org/public-education-spending-statisti...
- idiotsecant 6mo ago
  Your own link says CA spends less than UNESCO’s 15.0% standard. Also, you could frame this in a much more information dense way by making an active claim about something instead of just spamming a bunch of links.
  - dmix 6mo ago
    A quick google search of the UNSECO target is "at least 15% of total public expenditure (or 4–6% of GDP)" and both the US (~5%) and California (~4-5% of gdp) already pass that criteria.
    - rayiner 6mo ago
      The UNESCO target is calibrated for developing countries. Few developed countries spend that much on non-tertiary education: https://www.oecd.org/en/data/indicators/public-spending-on-education.html https://www.oecd.org/en/data/indicators/public-spending-on-e.... Canada spends about 3.3%, less than California. (I think your numbers include tertiary education. My numbers are K-12 only. I’m not sure which of those the UNESCO target is based on.)

pclowes 6mo ago

This is wild. A mistake of this magnitude should result in several positions becoming vacant and many politicians being ineligible for any future offices. If a government can’t budget accurately everything else they do is likely even less competent. Every number and statistic they report should be treated with suspicion. Without clear data who is to say they are doing anything helpful at all?

pclowes 6mo ago
[flagged]
- tyre 6mo ago
  Or! People understand that everyone makes mistakes and firing anyone who does only leads to people prioritizing hiding their mistakes vs. fixing them. It’s helpful, whenever you find yourself saying something like, “the only real explanation to me”, to think of a good faith version before assuming that the most cynical take is reality.
  - deleted 6mo ago
    [deleted]
  - bongoman37 6mo ago
    [dead]
  - pclowes 6mo ago
    I think there are mistakes and then there are mistakes. There is a point where the postmortem needs to stop being blameless. Getting things like this wrong is an existential risk to a important institution. We can’t be genuinely concerned about lost faith in institutions and also not hold them to the highest levels of accountability.
dlcarrier 6mo ago
The errors were all within the CalPERS pension fund. The pensions are guaranteed by the state, so the fund is notorious for a complete lack of fiduciary duty, and these types of errors track with the general quality of their operation.

noobahoi 6mo ago

[flagged]

codethief 6mo ago

Related: In the German state of Baden-Württemberg they were miscalculating the number of active teachers for 20 years due to a software error, causing the state to employ 1440 fewer teachers than actually intended. https://www.spiegel.de/panorama/bildung/baden-wuerttemberg-schwere-panne-1-440-unbesetzte-lehrerstellen-entdeckt-a-35c32d79-14e5-43d8-b0c9-1efa83eeeb9f https://www.spiegel.de/panorama/bildung/baden-wuerttemberg-s...

NewJazz 6mo ago
How is that related? That's a long term calculation error vs short term forecasting error.
- RobRivera 6mo ago
  From my point of view, the Jedi are a state-funded militia coded as a tax exempt non profit!
  - unmole 6mo ago
    Why does tax exemption matter if they are state-funded?

boznz 6mo ago

Another indicator that the administration hasn't got a fucking clue what or where their (your) money goes.

seiferteric 6mo ago

Didn't something like this just happen last year (or year before) but in the opposite direction?

whalesalad 6mo ago

2 billion surplus? that's good for about 150 linear feet of high speed rail track in the middle of Salinas.

cdrnsf 6mo ago

Oops! They're still far easier to deal with than any federal agency.

testfoobar 6mo ago

Give it back?

hedgehog 6mo ago

The article doesn't really explain the overall budget, for scale it looks like in the 2025-2026 budget year CA planned to spend about $228B compared to $216B revenue ($227B in the previous year). https://ebudget.ca.gov/2025-26/pdf/Enacted/BudgetSummary/SummaryCharts.pdf https://ebudget.ca.gov/2025-26/pdf/Enacted/BudgetSummary/Sum...

tonymet 6mo ago

it’s less than 1% of the budget, and the state keeps overspending. Don’t get too optimistic

mlmonkey 6mo ago

> California's legislative leaders have known for months but did not make the issue public. Why would they give up a chance to make more money from the people? The government never misses an opportunity to pad its coffers. Reminds me of the CA State Parks department, which squirreled away millions of dollars and then was crying about lack of funding and hence wanted to shut down some parks.

xp84 6mo ago
Fun fact: I recently vacationed in Hawaii and couldn’t help but notice, despite groceries costing about 2x, gas there is a dollar cheaper than at home in California. California just can’t get enough tax money.
- reducesuffering 6mo ago
  Not really a fact, more of a bad anecdote. Currently HI gas is just $0.17 cheaper than CA, and I see many CA gas stations at $5.09, just like HI. A decent chunk of that comes from strict CA low pollution refining, you know, to help you breath better... https://gasprices.aaa.com/state-gas-price-averages/ https://gasprices.aaa.com/state-gas-price-averages/
  - xp84 6mo ago
    5.09 - lol, ok maybe in the rural parts of the state or something. In L.A. it's $5.50 at the very cheapest stations (read: go out of your way and maybe waste 10 minutes waiting, then wait in line to pay cash) and even Bakersfield is about $5.25 minimum. $5.60-5.75 is what I see on most normal stations. The refining regulations are so great that they have succeeded in forcing nearly every refinery here to close now, so I guess gas prices can just go asymptotic, since California only allows this special unicorn gas, and I doubt any of these oil companies are going to open a new refinery in Arizona to make this special formulation, when they're closing the refineries here that used to make it. Maybe Sacramento can buy the closed refineries and restart them at great taxpayer expense and create our version of state-owned oil companies, except instead of printing money they'll be printing debt.

jjtheblunt 6mo ago

"Gov. Newsom in January projected the state would have to grapple with a $2.9 billion shortfall. The confirmed miscalculation means that shortfall could be much smaller." So, the title is just plain misleading. California is less in deficit than they earlier calculated.

deleted 6mo ago
[deleted]

dogscatstrees 6mo ago

They should have used Claude Code for Excel.

SilentM68 6mo ago

My Opinion: Anyone who thinks this is a glitch in the system, or an honest mistake, should shift their mindset and start thinking more like a detective and less like a politician. California has been steadily declining for years, now. Waste, mismanagement, fraud are commonplace. This needs to be investigated by impartial third parties that can't be bought and paid for whose commitment must be verified via polygraph. Those that are found guilty need to be prosecuted and jailed. Being that this is California, what will end up happening is that the politicians will end up investigating themselves and miraculously be found not liable. ****** Unbiased-AI Deep Dive: https://archive.ph/jdyO4 https://archive.ph/jdyO4

legitster 6mo ago

Correction: This is a correction to the forecast - not the budget. By the state's own admission, there could be as much as an $18 billion dollar budget deficit if the state economy fails to grow as projected. It could also be a smaller shortfall if the economy is even better than expected. Miscalculations are pretty common and this is why they are revised several times a year.

apparent 6mo ago

> "This isn’t a calculation error – it’s revision to better estimate how these payments are made," said H.D. Palmer, a spokesman for Newsom's Department of Finance. Nice excuse. Reminds me of "it depends what the meaning of 'is' is".

hex4def6 6mo ago
"The memo stated Gov. Newsom's administration made two errors. The first involved double counting CalPERS contribution rates for the upcoming year, which the LAO said was a $1.6 billion miscalculation. The second issue involved incorrect contribution rates when the administration calculated how much money the state would need to contribute to CalPERS in the years ahead. The LAO stated that mistake amounts to about $450 million. " ... "This isn’t a calculation error – it’s revision to better estimate how these payments are made," said H.D. Palmer, a spokesman for Newsom's Department of Finance. "We told legislative leaders and the LAO back in February that we would update how we estimate these payments once this issue was identified. We’ve already made that adjustment, and it will be reflected in the revised budget next month." Can someone please explain to me how double-counting isn't a calculation error? Best attempt wins. When a political organization has no qualms about putting out a statement like that, it's a sign that they do not respect you.
- apparent 6mo ago
  Agree completely. You can say "it was this kind of error not that kind of error" but not "it's not an error it's a revision". They made a revision to fix the error.