SACRAMENTO, Calif. —

California lawmakers and the governor will need to prepare for an $18 billion budget deficit next year, state Legislative Analyst Gabe Petek said Wednesday.

Petek leads the office of budget and policy watchers that guide the state Legislature in its financial decision-making, known as the Legislative Analyst's Office. Wednesday's update is part of the budget outlook report the office releases at this time every year.

In a matter of months, state lawmakers and Gov. Gavin Newsom will begin discussing how to use taxpayer dollars for the 2026-2027 budget year, a plan that needs to be in place by July 2026.

In the report, the office stated the $18 billion budget deficit for the 2026-2027 budget year is about $5 billion more than state officials were anticipating. The

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