California

OneCrazyDiamond

(2,048 posts) Tue Jun 27, 2023, 02:36 PM Jun 2023

California's new budget covers $32 billion deficit without touching reserves

https://apnews.com/article/california-state-budget-2023-2db8442a1d7c0ecc5b6827207c1dad03

California Gov. Gavin Newsom and the Democrats who control the state Legislature agreed late Monday on how to spend $310.8 billion over the next year, endorsing a plan that covers a nearly $32 billion budget deficit without raiding the state’s savings account.

The nation’s most populous state has had combined budget surpluses of well over $100 billion in the past few years, using that money to greatly expand government.

But this year, revenues slowed as inflation soared and the stock market struggled. California gets most of its revenue from taxes paid by the wealthy, making it more vulnerable to changes in the economy than other states. Last month, the Newsom administration estimated the state’s spending would exceed revenues by over $30 billion.

The budget, which lawmakers are scheduled to vote on this week, covers that deficit by cutting some spending — about $8 billion — while delaying other spending and shifting some expenses to other funds. The plan would borrow $6.1 billion and would set aside $37.8 billion in reserves, the most ever.

“In the face of continued global economic uncertainty, this budget increases our fiscal discipline by growing our budget reserves to a record $38 billion, while preserving historic investments in public education, health care, climate, and public safety,” Newsom said.

California has the best leadership in the nation. I almost can't wait for The Harris/Newsom Administration in 2028.