Elon Musk warns California risks bankruptcy without reforms. Despite Newsom’s balanced $322B budget, experts predict $20–$30B deficits due to volatile tax revenue and federal aid reliance. A $40B wildfire aid request may add further strain.

Elon Musk has raised concerns about California's financial stability, suggesting the state may face bankruptcy. Governor Gavin Newsom grapples with a significant budget deficit, while Musk points to high public spending and restrictive business regulations as key issues contributing to the state's economic downturn.