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California


NEWSOM AND DEMOCRATS ANNOUNCE A PLAN TO REDUCE THE ENORMOUS BUDGET DEFICIT. HOW?
TBD

Gov. Gavin Newsom discusses his proposed state budget for the 2024-25 fiscal
year during a news conference in Sacramento in January.
(Rich Pedroncelli / Associated Press)
By Taryn LunaStaff Writer 
March 21, 2024 3 AM PT
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With a budget deficit of at least $38 billion hanging over their heads, Gov.
Gavin Newsom and Democratic leaders of the state Senate and Assembly announced
an agreement on Wednesday to take action in April to begin to dramatically
reduce California’s historic shortfall.

The problem: Democrats at the state Capitol couldn’t actually agree on an amount
— offering only a range of $12 billion to $18 billion — or explain what,
exactly, they plan to cut.

Those details, the governor’s office said, will be discussed and shared next
month.

The head-scratching announcement of a plan to have a plan comes as pressure
mounts on Democrats over the looming fiscal crisis.


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Newsom has urged the Legislature to take “early action” to begin to whittle away
at the deficit now — well before the June deadline to pass a budget — by clawing
back unspent funding, delaying programs and reducing planned spending. The cuts
currently under discussion are largely considered the easier choices, with the
hope of freeing up Democrats to focus on tougher deliberations that will come
later this spring when the full scope of the budget hole becomes clearer.

The Senate unveiled its own plan last week to slice off $17 billion from the
deficit with early cuts, which include delaying and pulling back more than $1
billion to expand early education classrooms and support school facilities. But
the Assembly, where Democrats hold 62 of 80 seats under a new speaker who has
promised to give his members more input on big decisions, has been slower to
rally behind a plan.

The struggle to reach a real consensus on the early cuts speaks to the challenge
ahead as Democrats embark on a process to correct what could be the largest
fiscal deficit the state government has ever experienced. Some estimates suggest
the shortfall could be nearly twice as much as Newsom’s estimates, which will
force lawmakers to make difficult choices in May and June about programs that
affect millions of Californians.



Democrats often pass an initial budget by the June 15 mandate required by state
law and revise it again before the fiscal plan takes effect on July 15.

“In some ways, I think this forces an earlier reckoning of the reality of what
they’re going to have to actually vote on,” said Rob Stutzman, a longtime GOP
strategist who worked for Gov. Arnold Schwarzenegger. “And they’re going to
wholly own it.”

California


HOW NEWSOM PLANS TO FIX CALIFORNIA’S PROJECTED $37.9-BILLION BUDGET DEFICIT

With weaker revenues than expected, Gov. Gavin Newsom wants to declare a budget
emergency and ask California lawmakers to dip into the state’s reserves.

Jan. 10, 2024

Whereas Republicans shared the pain during the budget crisis in Schwarzenegger’s
era, now Democrats control the governor’s office and both houses of the
Legislature by wide margins.

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Only a handful of lawmakers have experience in office during the prior budget
crisis, and Newsom has never been forced to make cuts of this magnitude.

His call to shave the deficit early has been met with mixed responses from the
Legislature, prompting Newsom to come to the Capitol this week for meetings with
Democrats in the Senate and the Assembly leader in hopes of reaching an
agreement before they leave Sacramento for spring break on Thursday. Lawmakers
are expected to pass one of Newsom’s major budget proposals before the recess, a
tax increase on managed-care organizations that allows the state to draw more
federal funds for healthcare.

In a statement included in the announcement of the agreement, California Senate
President Pro Tem Mike McGuire (D-Healdsburg) said the Senate is ready to move
quickly on tough budget decisions.

“The deficit is serious and it’s grown by billions since January, which is why
we must move with speed to shrink the shortfall immediately,” McGuire said.

The Senate’s plan to cut $17 billion, coupled with a desire to tap $12.2 billion
from the rainy day fund, could leave lawmakers with $29 billion less to offset
in June.

Newsom’s Department of Finance has said the governor’s administration backs the
Senate’s package. But the Assembly has yet to detail how it wants to move
forward.

Politics


VOTERS SAY CALIFORNIA’S BUDGET DEFICIT IS AN ‘EXTREMELY SERIOUS’ PROBLEM, POLL
FINDS

What do voters think about the governor and potential solutions to the state’s
looming budget deficit?

Jan. 18, 2024

The budget chair of the lower house, Assemblymember Jesse Gabriel (D-Encino),
held a news briefing on Friday and said the Assembly appreciated the proposals
from the governor and Senate, but also needed more time.

“We value process and we value time to consider all of these trade-offs,”
Gabriel said.

Gabriel said the Assembly planned to put forth its proposal in April. He said he
could foresee the Assembly taking some early action but he also saw advantages
to waiting until June to have more certainty about the size of the shortfall.

In a statement released Wednesday with the vague announcement of a forthcoming
agreement, Assembly Speaker Robert Rivas (D-Hollister) hailed it as “an
important first step” and said “the Assembly is committed to a deliberative,
transparent budget process that protects hard-working Californians.”

But the lack of details in the announcement about the cuts that Democratic
leaders are considering is an example of the complete opposite, said Sen. Roger
W. Niello, a Republican from Fair Oaks and vice chair of the Senate Budget
Committee, in a statement. He called it “unilateral decision-making happening
behind closed doors by one political party.”


MORE TO READ


 * PUBLIC DEFENDERS, FOSTER KIDS, CLIMATE: PROGRAMS CREATED DURING CALIFORNIA’S
   BOOM MAY STALL AMID DEFICIT
   
   April 18, 2024


 * NEWSOM CALLED IT A ‘GIMMICK.’ NOW HE’S USING THE TRICK TO LOWER CALIFORNIA’S
   MASSIVE DEFICIT
   
   April 11, 2024


 * NEWSOM AND DEMOCRATIC LAWMAKERS DETAIL FIRST CALIFORNIA BUDGET CUTS TOTALING
   $17 BILLION
   
   April 4, 2024

CaliforniaPoliticsCalifornia Politics
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Taryn Luna

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Taryn Luna covers Gov. Gavin Newsom and California politics in Sacramento for
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