California Gov. Gavin Newsom has projected a $22.5 billion budget deficit for the upcoming fiscal year. That's a sharp turnaround from the $98 billion surplus Newsom had to work with last year. Newsom announced the deficit Tuesday as he lays out his spending priorities for the fiscal year that starts in July. The state has about $35.6 billion in reserves. The deficit isn't surprising. California relies heavily on taxes from the richest Californians, which can cause budget whiplash as the economy and stock market shift. Still, the deficit could signal the end of a decade's worth of economic growth in the nation's most populous state.

California Gov. Gavin Newsom has kicked off his second term by comparing his leadership style to that of Republican governors and former President Donald Trump. The Democratic governor's inaugural address crafted California as a beacon for freedom amid a rising tide of oppression taking hold in other statehouses. He chose Jan. 6 for the events to draw a contrast with the violent attack on the U.S. Capitol two years ago. Newsom enters his second term with strong support from Californians but potential headwinds in the form of an expected budget deficit. He is viewed as a future presidential candidate but says he plans to support President Joe Biden.

California faces a projected deficit next year even if the U.S. avoids a recession. Despite the expected shortfall, policymakers say they’ll m…