Experts Warn California Could Experience Significant Financial Shortfall Due To Coronavirus Response
SACRAMENTO (CBS13) — The California State Assembly held a budget hearing Monday afternoon discussing the state's response to the coronavirus.
California has a $17 billion surplus and some of that money is already being used in a variety of ways in the fight against the coronavirus.
While Governor Gavin Newsom expects to spend $7 billion on coronavirus alone, financial experts warn the state's surplus could drain fast.
READ ALSO: Coronavirus Protesters Take Over Capitol, Call To 'Open Up California'
"We can probably see a shortfall here, you know, we are going to see a huge hit in the budget here and we should probably prepare for that," said Sanjay Varshney, Professor of Finance at Sacramento State.
Although the California Department of Finance expects the federal government to reimburse up to 75% of the state's spending on the virus, California could still see a shortfall.
"Prepare for the likelihood we are going to go from this surplus mode to deficit mode very quickly and we got to figure out how we will address that shortfall," Varshney said.