California Governor Gavin Newsom (D) announced a revised budget plan to address the state’s $32 billion deficit.
Since January, the state’s deficit has grown by $10 billion, as reported by the AP. While the state’s budget is balanced this year, in the coming years the state is committed to spending more money than it will receive from taxpayers.
In the current tax system, the state receives 50 % of its taxpayer dollars from 1% of the population. When the economy and stock market are doing well, the state will receive more in taxes, but when the economy is on the brink of a recession, the wealthy will pay less in taxes.
The press release states:
While the May Revision does not forecast a recession, it recognizes increased risks to the budget since January that could significantly change the state’s fiscal trajectory in the near term. Taking this into account, the plan reflects $37.2 billion in total budgetary reserves, including $22.3 billion in the Budget Stabilization Account.
“This was not an easy budget, but I hope you see we will try to do our best to hold the line and take care of the most vulnerable and most needy, but still maintain prudence,” Newsom said.
Fox News reports that Gov. Newsom’s latest proposal calls for a spending reduction of $1 billion, and the rest of the deficit he is covering by taking money from the state’s safety net reserve and borrowing.
While Gov. Newsom said he was able to protect key issues that matter most to Californians, Assembly Republican Leader James Gallagher said Newsom’s revised budget proposal cuts critical programs while continuing to fund money to failed projects like High Speed Rail.
“Only Gavin Newsom could turn a $100 billion surplus into a $31 billion deficit in less than a year,” Gallagher said in a press release. “His approach to closing this budget gap is more of the same. His cuts to drought programs are dangerous, his “fiscal gimmicks” are shortsighted, and his words about good government and efficiency are yet another empty promise. Californians deserve better.
Newsom’s revised budget comes just a week after Breitbart reported that a California’s task force on reparations would cost the $800 billion — more than twice the cost of the state’s budget.
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