As Gov. Gavin Newsom prepares to unveil his revised budget proposal, California is experiencing unexpectedly shaky economic conditions, with a likely deficit of more than $10 billion next year.

California is experiencing unexpectedly shaky economic conditions, as health care costs rise and Trump’s tariffs create ongoing uncertainty.

President Donald Trump’s tariff policies are projected to cut California’s tax revenue by $16 billion in the next fiscal year, Governor Gavin Newsom’s finance department said in a memo. The 4% drop in revenue from a previous estimate is largely due to a stock market downturn last month after the president announced his sweeping tariff campaign on April 2,