Newsom Blames ‘Trump Slump’ for California’s $12 Billion Deficit

California Governor Gavin Newsom unveiled a budget proposal that aims to close a $12 billion deficit, marking the third consecutive fiscal year in which state lawmakers need to plug significant shortfalls.

Newsom, a second-term Democrat, said that a projected $363 million discretionary surplus for the upcoming fiscal year has morphed into a deficit in the months since his office unveiled his January budget proposal as new federal trade policies under President Donald Trump have dampened California’s revenue projections and its economic outlook.

The swelling deficit is largely the result of uncertainty created by Trump’s tariffs — which have prompted economists ...