California's budget deficit has grown to nearly $32 billion, Gov. Gavin Newsom announced Friday, saying the state's challenges are partly due to high inflation and a decision to let most people delay filing their taxes because of a series of winter storms.
That’s about $10 billion more than Newsom predicted in January, when he offered his first budget proposal. The deficit is part of Newsom’s overall proposal for a $306 billion budget, by far the largest state budget in the nation.
He’s making up the rest of the deficit by shifting expenses, taking some money from the state’s safety next reserve and borrowing. “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,” Republican Assembly Leader James Gallagher said in a statement.Since taking office in 2019, Newsom’s biggest budget fights with the Democratic-controlled state Legislature is how to spend California’s record-breaking surpluses. Agreeing on what to cut could be much more difficult.
It’s not yet clear if he can or will relent on his other proposed cuts. Newsom signed off on an expansion of a subsidized child care program last year that would pay to help an extra 20,000 families. But because of the deficit, Newsom proposed delaying that funding for one year. He argued that the state was having trouble filling the child care slots it already had.
It’s not just child care though. Democrats in the state Senate want to raise taxes on 2,500 of the largest companies so they can cut taxes by about 25% for most other businesses — a plan that Newsom has already said he opposes. And environmental groups want Newsom to reverse his planned $6 billion cut to some of his climate proposals.
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