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California’s budget mess just got a whole lot messier — and a whole lot more embarrassing.
Top lawmakers sat on a staggering $2 billion accounting blunder for months while publicly warning of a looming budget crunch, according to a bombshell memo that’s now blowing the lid off the quiet deception.
Gov. Gavin Newsom’s administration built its January budget proposal around a projected $2.9 billion shortfall — but that figure was quietly thrown into doubt after officials discovered they’d badly botched the math tied to the state’s massive pension system, CalPERS.
Instead of sounding the alarm, legislative leaders kept the mistake under wraps.
The error — actually two separate miscalculations totaling roughly $2 billion — was flagged as far back as February by the state’s nonpartisan Legislative Analyst’s Office, led by Gabe Petek. Yet despite months of budget hearings and public hand-wringing over deficits, the public was left in the dark.
“Given the size and complexity of California’s budget, it is not uncommon that we come across errors stemming from calculation mistakes or formula errors etc,” Petek said to KCRA 3 on Friday. “Part of the role of our office is to serve as a check on the administration’s budget calculations. So, in the case of this CalPERS example, you are correct, we did identify a double-counting error and given that this error is on the larger side, we notified the Legislature of it for their situational awareness.”
It’s still unclear why neither lawmakers nor Newsom’s team bothered to come clean while hammering out the state’s spending plan behind closed doors.
Newsom’s camp is now scrambling to downplay the fiasco, insisting it wasn’t really a mistake at all.
“This isn’t a calculation error – it’s revision to better estimate how these payments are made,” said H.D. Palmer, a spokesman for the governor’s Department of Finance. “We told legislative leaders and the LAO back in February that we would update how we estimate these payments once this issue was identified. We’ve already made that adjustment, and it will be reflected in the revised budget next month.”
Republicans aren’t buying it — and they’re hammering Democrats for what they see as a pattern of secrecy.
“This administration continues its track record of lacking transparency, preferring to keep the legislature and the public in the dark to avoid having to justify cuts while spending millions on their pet projects,” said Assemblyman David Tangipa, R-Fresno, who is the vice chairman of the Assembly’s Budget Committee.
When pressed on why no one spoke up, officials offered little clarity.
“These are tracked in January and May budget revisions from the administration. This is standard practice,” said Jason Sisney, the state budget advisor for Assembly Speaker Robert Rivas.
But when asked whether it’s “standard practice” to keep a multibillion-dollar mistake quiet, Sisney went silent.
With Newsom’s revised budget due next month, the stunning error — and the months-long hush around it — is now front and center as lawmakers brace for yet another bruising budget fight.
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