California budget is $12 billion in the red amid Trump tariffs and rising costs

Gov. Gavin Newsom today announced that California is facing a $12 billion budget deficit, spurred by soaring costs for social services as the state’s economy teeters from President Donald Trump’s chaotic tariffs strategy.

Unveiling his revised $322 billion spending plan, Newsom repeatedly blamed the tariffs for undermining key industries and eroding financial markets that are crucial to California’s fiscal health — a “Trump slump” that he forecasts will reduce tax revenues by billions of dollars next year.