Governor-elect Xavier Becerra Faces $29 Billion California Budget Deficit

Governor-elect Xavier Becerra must address a $29 billion budget deficit in California following his election on November 3, 2026. Outgoing Governor Gavin Newsom leaves the state with what legislature budget analyst Gabe Petek called a "wall of debt," resulting from an average annual overspending of $37 billion over eight years. During this period, the state spent $1.7 trillion against $1.4 trillion in revenue.

Becerra is required to submit a new budget to the Legislature shortly after his January inauguration. To close the gap, he has indicated a willingness to increase taxes on high-income residents and close corporate tax loopholes. His proposed measures include implementing a mileage-based tax on electric cars and taxing employers whose low-paid workers receive Medi-Cal benefits.

Although Becerra opposed the billionaire wealth tax in Proposition 40, he maintains that billionaires should not pay lower tax rates than essential workers. He stated, "If you’re a billionaire and you’re paying at a lower tax rate than a firefighter or a teacher or a nurse, you’re not paying your fair share."