California Gov. Gavin Newsom (D.) revealed Tuesday that the state faces a $22.5 billion deficit in the coming fiscal year, a far cry from last year’s $98 billion surplus.
Newsom announced the deficit in a speech unveiling his proposed 2023-24 budget, which includes $297 billion in spending proposals, an $11 billion decrease from last year. The Democrat acknowledged that the state is “in a very volatile moment … of uncertainty,” which he noted could worsen over the coming months.
The governor dismissed the “old narratives” that Democrats are “profligate” and incapable of “managing budgets,” instead laying the blame on California’s dwindling tax base, which is now roughly half of what it was last year.
It was an atypical speech for Newson, who has a history of dispensing politically advantageous cash. Newsom sent $600 stimulus checks to each Californian, which landed in mailboxes shortly before a 2021 vote to recall him from office. Last year, the governor spent the $100 billion surplus on temporary spending for homelessness, climate, mental health, and other programs.
Now, just five days into his second term, Newsom is singing a different tune. The governor announced a strategy of spending “delays,” including on mental health, preschool “inclusion” grants, climate programs, and University of California capital investment. His budget also proposes using federal dollars to make up for reductions to the state’s much-touted climate initiatives.
California public schools, where students have performed poorly since the pandemic closures, will see a funding boost. Newsom is also maintaining billions in homelessness spending and won’t delay plans to roll out health coverage for illegal immigrants.
“People are dying on the streets all across the state,” he said. “The encampments, we’ve got to clean them up, we’ve got to take responsibility, more accountability, and more transparency. There’s never been more resources, ever, period, full stop, including with this budget.” The governor pledged not to raise taxes to pay for these programs or cover the deficit.
Newsom will revise his proposed budget in May, before sending it to the state legislature for approval. Speaking Tuesday, he pledged not to pull from the state’s rainy day fund in the interim, noting that the economic forecast could worsen in the meantime. California’s Legislative Analyst’s Office has projected a major economic hit if a recession sets in this year.
Newsom, who is considered to be weighing a 2024 presidential run, managed to work some political attacks into the otherwise somber speech, slamming Republican leaders’ “obsessiveness” with California and boasting that the state has the “moral authority” to push back on such criticisms.
Published under: Budget Cuts, California, Deficit, Gavin Newsom
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