Daily Business Report: Tuesday, April 1, 2025
California food banks brace for funding cuts, and not only from the Trump administration
By Jeanne Kuang | CalMatters
Five years since the COVID-19 pandemic upended the economy and made millions experience hunger for the first time, demand at the Sacramento Food Bank and Family Services is still higher than ever.
The number of monthly clients has risen to 310,000, more than double the number of people the food bank served before the pandemic, spokesperson Kevin Buffalino said.
So it was a blow this month, he said, when the U.S. Department of Agriculture halted hundreds of millions of dollars in federal funds for food banks. Caught up in the freeze were 11 truckloads of food – 400,000 pounds – that the Sacramento food bank was expecting over the next few months.
If California bails out LA’s $1 billion budget deficit, beware the slippery slope
By Dan Walters | CalMatters
As fate would have it, the very destructive and deadly wildfires that swept through Los Angeles neighborhoods this year erupted as its city officials were struggling to close a large gap in their budget.
At the time, the city’s deficit was estimated to be $600 million, but this month it was updated to nearly $1 billion.
It would be tempting to attribute the larger shortfall to the fires, and they undoubtedly are a factor. But City Controller Kenneth Mejia has repeatedly warned Mayor Karen Bass and city council members that the city was overspending vis-à-vis revenues, creating a growing structural deficit.
From his first warnings in 2023, Mejia consistently warned city officials and the public about “financial trouble including less-than-expected revenues, increased liability payouts, and increased payroll costs and the effects this has had on the city’s budget, departments, and services,” his office said in a news release last week.
California politicians have an irritating habit of ignoring the downsides
By Dan Walters | CalMatters
California’s governors and legislators have a number of irritating habits, such as using sneaky tactics to pass legislation with little or no public notice, or exempting themselves from the rules that govern others.
However, the topper is their tendency to enact sweeping programs or policy decrees that promise positive benefits without fully weighing the risks.
The state’s bullet train project is a case in point. Blithe promises made to voters about costs and completion dates proved to be wildly inaccurate. Nearly two decades after a bond issue was approved, the project is a zombie, neither dead nor fully alive.
The annual budget process exemplifies the syndrome, as recent history underscores. A huge mistake in revenue projections three years ago led to a surge of spending that cannot be covered, resulting in chronic deficits.
