California Budget Hole Even Deeper Than Predicted, Newsom Says

California's budget deficit has swelled by nearly $10 billion so far this year, Gov. Gavin Newsom (D.) said Friday as he unveiled a revised $306 billion state budget proposal.

The projected shortfall has reached almost $31.5 billion, Newsom reported, up from $22.5 billion when he first proposed the budget in January. Newsom warned that even a mild economic recession could bring an additional $40 billion hit. He blamed the state's progressive tax system, which leans heavily on the richest Californians, for the dramatic decline in fortunes since a year ago, when he touted a $97.5 billion budget surplus.

"We have one of the most volatile tax structures because of the overreliance, or the disproportionate reliance, on a very small subset of tax filers," Newsom said.