Governor Gavin Newsom says last year’s $68 million budget deficit is now completely erased, and he claims the state is running a surplus again, though he won’t say how much of a surplus.California Governor Gavin Newsom was crowing away in late November that the state had nearly eliminated its budget deficit, after that deficit had hit nearly $68 billion in late 2023. But the state’s Legislative Analyst’s Office has crunched those numbers a little further as the state begins its 2025 budget process. And Newsom took to a stage in Turlock Monday to tout how that office concluded that California is no longer running a budget deficit, and is in fact now running a modest surplus.   Newsom made the announcement while unveiling his proposed $322 billion state budget, one that does not have a deficit. But it's also a budget unlikely to receive much help from the incoming Trump administration, and there may be unpredictable setbacks coming thanks to Trump’s mass deportation plans.  “Even as we were working with the Trump administration, they were still assaulting our values and programs and hard-earned rights under the law,” Newsom said at a Monday event in Turlock. “We should anticipate nothing less than that.”“We’re walking into headwinds,” he added. “We need to be prepared.”Newsom is thus far refusing to say how much of a surplus the state is running, though the Chronicle reports he “suggested it would be small.” Still, it's better to be in surplus times than deficit times, and the state is in surplus times again. That's likely because of income gains in the top 1% sector of high earners, and the largesse in capital gains taxes from a booming stock market. As CBS News points out, in California, “nearly half of the state's income tax collections comes from only 1% of the population.”The new surplus means Newsom will probably carry forward on tax incentives for electric vehicles, and for TV and film producers to shoot in California. Newsom’s opponents, meanwhile, do not credit him with creating a strong state economy.“Handing out tax breaks to Hollywood and spending on AI is great for the state’s billionaires, however, the rest of us feel like we’re drowning in growing costs,” California Republican Party vice chair Corrin Rankin told reporters after Newsom’s press conference. Related: Good News for Newsom, as California Deficit Slashed From $68 Billion to Just $2 Billion [SFist]SAN FRANCISCO, CALIFORNIA - SEPTEMBER 17: California Gov. Gavin Newsom (L) talks onstage with Salesforce CEO Marc Benioff (R) during Salesforce's Dreamforce on September 17, 2024 in San Francisco, California. Some 45,000 workers in the tech industry were expected to attend the annual Dreamforce event, which runs through September 19. (Photo by Justin Sullivan/Getty Images)