On Tuesday, Newsom will reveal his plan to cover what is expected to be a multi-billion dollar budget deficit.
The money has come mostly from a soaring stock market thatof California-based tech companies. Those companies — including the likes of Uber, Airbnb, Lyft and Pinterest — made lots of people very rich, creating a new class of millionaires and billionaires in a state with a progressive tax code where nearly half of all income taxes come from the top 1% of earners.
Plus, the state has $37.2 billion stored across its various savings accounts, which by itself would be more than enough to cover a $25 billion deficit. Constitutional limits prevent lawmakers from emptying reserves to cover a deficit. And unlike the federal government, California’s budget must be balanced. Newsom and lawmakers will have to tighten state spending to cover all of the shortfall — something that Senate Budget Committee chair Nancy Skinner said is doable.
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