Gov. Gavin Newsom and legislative leaders reached a nearly $300 million budget agreement on Saturday that closes a $46.8 deficit that was projected for the coming fiscal year with across-the-board cuts of nearly 8% to every department.
The $297.5 billion budget is proposed for both the 2024-25 fiscal year and the 2025-26 fiscal years, a maneuver the governor in May called a “budget year, plus one” proposal that he said would help bring spending in line with revenue projections over the next two years.
“This agreement sets the state on a path for long-term fiscal stability – addressing the current shortfall and strengthening budget resilience down the road,” Newsom said. “We’re making sure to preserve programs that serve millions of Californians, including key funding for education, health care, expanded behavioral health services, and combatting homelessness.”
The gap was closed with a combination of $16 billion in cuts and other financial tricks, such as $13.6 billion in additional revenue sources and internal borrowing from special funds. It shifts around $6 billion in spending, delays or defers over $5 billion in payments, and draws over $12 billion over the next two fiscal years from the state’s Budget Stabilization Account known as the rainy-day fund.
The cuts include $1.1 billion to various affordable housing programs and $500 million from the California Student Housing Revolving Loan Program, which was established in 2022 and gives zero-interest loans to universities and colleges to build affordable housing.
About $2.2 billion is saved by the 7.95% cut to every department’s budget. An additional $1.5 billion was reduced from departments’ budget to fill vacancies.
Senate President Pro Tempore Mike McGuire, D-Marin, said cuts were less than anticipated in May but would still be felt.
“This is a tough budget year, but it also isn’t the budget situation we were originally fearing,” McGuire said.
“This balanced budget helps tackle some of our toughest challenges with resources to combat the homelessness crisis, investments in housing, and funding to fight wildfires and retail theft,” he said.
Assembly Speaker Robert Rivas, D-Salinas, said the budget prioritized “affordability and long-term stability.”
“We secured crucial investments to lower housing costs and keep people in their homes, and to sustain essential programs that help vulnerable families thrive,” Rivas said.
Some of the new revenue sources in the agreement include limiting the business tax credit to $5 million in each of the next three tax years, which would raise about $15 billion over the next three fiscal years.
The budget bill must be approved by the full legislature before being finalized with the governor’s signature.
12 comments
I have an idea for budget cuts:
1. It Newscum salary by letting him go.
2. Quit paying for every illegal who crosses the. Order.
3. Out paying for residents of other states to get ‘medical services’ in our state.
Hmmmm
1. Cut the elected officials pay and benefits.
2. Only pay for the poor US citizens medical that are residents of California.
3. Stop the minimum wage crap of $25 per hour for everyone working in or for the medical system. That will only increase state expenses.
4. Make our legislators part time and pay accordingly.
5. Reduce our government controls over our citizens.
6. Combine some departments that have over lapping duties.
So Newsom adds $20 minimum wage to small franchise owners but then postpones minimum wage to health care workers because of the financial impact on state budget. Then he budgets $12 million for reparations for slavery in our state that never had it. California legislators are a joke.
By the law, enslavement of Native American children was legs beginning in 1850 and enslave African Americans could be brought into California.
IDIOTS RUNNING AND RUINING CALIFORNIA
Nowhere did they mention the budget cuts to the Dept of Corrections, the trial courts, and the Dept of Justice Division of Law Enforcement. It’s all fancy talk for firing prison personnel, and closing some of the state’s prisons, defunding the police, and cutting trial courts budgets. They conveniently left out the part where Newsom is granting an early release to tens of thousands of prison inmates. When they say they are shifting funds to “equity programs,” they are talking about low-cost housing, free health care and free education for the millions of illegal invaders taking over our communities.
https://www.yahoo.com/news/newsom-proposes-defunding-police-prisons-090024145.html
More smoke and mirrors and kicking the can down the road instead of doing the hard part of the real job…. they’re just trying to protect their own political career instead of looking out for legal residents
I’m allergic to some of the ingredients in this word salad. Does closing the projected deficit mean the existing deficit isn’t going anywhere? They bragged about the budget surplus not all that long ago before blaming the deficit on the weather.
“State lawmakers” = Democrats.
Vote all these A-holes out!
Shut down that money pit Hi-Speed rail to nowhere and fix our roads!
This is not a way to run a state. The state income tax structure is such that high income earners pay disproportionately high taxes while middle and lower income earners pay disproportionately low taxes. This tax structure has been a result of at least two statewide initiatives where the California electorate approved increases on the high income earners. Because there is no political will to change the California tax code, we will continue to see these boom and bust cycles. And I’ll be the first to say it: The Democratic dominated legislature is to blame for these spending orgies that ignore the cyclical nature of state revenue.
Governor Newsom and his administration have systematically destroyed and bankrupted the state of California. His buddy Biden has pretty much done the same to the country. They both should be incarcerated for their destruction to both…
The State of California and how its run is a joke. But…for those that vote for the “D”….you get what you vote for.
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