SACRAMENTO — California’s budget deficit has soared to nearly $32 billion, Gov. Gavin Newsom said Friday as he announced a plan that would cover the shortfall this year while potentially leaving the state with multibillion-dollar deficits in the future.
Newsom, a Democrat in his second term, proposed no major tax increases for individuals or spending cuts across the state’s most important programs, including those impacting public education, health care and homelessness. His plan would cut spending by about $10.6 billion – about $1 billion more than what he proposed in January – while covering the rest of the deficit through a combination of borrowing and delaying some spending while shifting other expenses to different sources.
“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.
Unlike the federal government, California must pass a balanced budget every year – meaning the state’s revenue and expenses must be the same. Newsom’s budget is balanced this year. But in the future, it would commit the state to spending more money than it is projected to have. Under Newsom’s plan, the deficit would be $5 billion next year and grow to $14 billion by 2027.
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