Gov. Gavin Newsom says the state's budget deficit is $27.6 billion. The figure Newsom announced Friday is smaller than the deficit he anticipated in January. That's because it doesn't take into account $17.3 billion worth of budget actions he and lawmakers have agreed to take to close the gap. He's now proposing to help balance the budget by eliminating 10,000 vacant state jobs and suspending some business tax deductions. The Democratic governor says some of those cuts will also help balance next year's budget, as state revenues are projected to keep falling. The state Legislature must pass a spending plan by June 15.
California lawmakers have voted to reduce the size of the state's deficit. The state Legislature on Thursday approved legislation that takes a number of steps to reduce the deficit by about $17 billion. Gov. Gavin Newsom has said the deficit is about $38 billion. The nonpartisan Legislative Analyst's Office says it could be as much as $73 billion. Much of the savings come from canceling or delaying spending that had been approved in previous years but not spent yet. Republicans criticized the move as pushing the deficit problems into the future. Democrats say the action makes the deficit much more manageable.
California Democratic leaders have announced they have agreed on a plan to reduce the state's staggering budget deficit by $17.3 billion. California is facing a multibillion-dollar budget shortfall of at least $37.9 billion. The agreement announced Thursday includes a $3.6 billion cut in primarily one-time funding, delaying and deferring about $5.2 billion in spending on various programs. It also authorizes Gov. Gavin Newsom to freeze an unspecified additional one-time funding. It omits a previous proposal to cut housing and homeless services. Republicans say they were shut out of the conversation. Lawmakers are expected to vote on the deal next week.
President Joe Biden has issued a budget proposal for a second term aimed at getting voters' attention with tax breaks for families, lower health care costs, smaller deficits and higher taxes on the wealthy and corporations. The proposal for fiscal 2025 is unlikely to pass the House and Senate and become law. It's an election year blueprint sketching what the future could hold. If it became law, deficits could be pruned $3 trillion over a decade. Parents could get an increased child tax credit. Corporate taxes would jump upward. Billionaires would be charged a minimum tax of 25%. It also has a $2,000 cap on drug costs. House Speaker Mike Johnson called the proposal a glaring reminder of the administration's "insatiable appetite for reckless spending."
