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Comment by PragmaticPulp | Hacker News Reader

I don’t understand California’s finances at all.

Only a year ago they declared a budget crisis with a $54 billion deficit. https://www.cbsnews.com/news/california-budget-crisis-gavin-...

Now they have a $75 billion budget surplus, 1/3 of which came from emergency federal funds: https://www.msn.com/en-us/news/politics/california-budget-su...

I suppose paying off past-due rent is fair to landlords who were required to house tenants rent-free and it could be argued that it’s coming from the federal COVID funds, but that’s still a huge chunk of budget to spend.

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There are a lot of very wealthy people in California who paid a lot more capital gains tax in 2020 than people predicted.

From what I understand California has a very progressive tax system and as a consequence revenues vary by a lot. If wealthy Californians have a good year the coffers bulge but when they don't ... everything dries up.

Not necessarily a problem if the State spent like that but they tend to spend like every year will be a fat year. Go figure.

Nearly every state thought they were having a budget crisis a year ago because it looked like there was going to be an unprecedented economic crash.

Most of them are doing much better now since the pandemic-related economic downturn turned out to be much milder than originally anticipated.

Two things come to mind

- Federal funds is really just debt sold to investors and passed on to the states.

- Newsom is up for recall and most of the anger towards him is how much he fumbled stimulus and the pandemic.

Pretty easy to see that he probably called in some favors at the federal level to save himself.

California got bailed out by the IPO mania of 2020

It’s almost as if the system balanced itself out.

Not surprising when the purchasing power of USD is continuously lowered to ensure debts are repaid. Nominally, everything is fine.

Once you factor in the lockup period, I doubt this is the case. You're probably just seeing people who did well as the market did well overall.

What’s not to get? The federal government gave them a huge amount of money to pay off their debts

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