LAO Warns of Reckless Reliance on Volatile Revenues, Reserve Depletion, and Painful Cuts Governor Gavin Newsom hailed his May Revision to the 2026-27 state budget as a triumph of fiscal discipline, announcing on May 14 that California has eliminated its deficit for the current and next budget years, with the structural gap closed through July 2028. "No deficit this year. No deficit next year," Newsom proclaimed, framing the plan as protecting investments in healthcare, educat