bloomberg.com California Governor Calls for 10,000 Fewer Jobs, Spending Cuts May. 10th, 2024 Newsom lowered general-fund spending down to $201 billion Newsom’s plan calls for a nearly 8% cut to state operations California Governor Gavin Newsom’s latest budget proposal looks to slash 10,000 unfilled jobs from the state’s roster and cut tens-of-billions of dollars in spending to close a gaping deficit left by inflation and a plunge in tax revenue from wealthy earners. In total, the governor is offering to cut $32.8 billion, including a nearly 8% reduction to state operations through the next two fiscal years. A fact sheet provided by Newsom’s office said the proposal will make the state “more efficient, leaner, and modern.” The governor’s office touted the plan for not raising taxes and preserving spending for key social service programs. The size of the deficit is largely due to swings in the stock market and faulty projections for the state’s three largest revenue sources: personal income taxes, corporate and sales taxes. Newsom’s office said budget officials have now lowered their estimate of how much the state is projected to take in from those three sources from 2022 through 2026 by $165 billion. “This is just a reminder of the totality of the challenges on the basis of the volatility of our tax structure,” Newsom said during a press conference on Friday. “The benefits of a progressive tax system during good years, the challenges during years where things are contracting.” The top 1% of California earners pay nearly half of personal income-tax collections. Newsom, a second-term Democrat, in January had proposed a $208.7 billion plan that shrunk the state’s general-fund budget nearly 10% from the current fiscal year in order to fill what was estimated at the time as a $38 billion deficit. But his updated spending plan released Friday — based on the latest revenue figures in what is known as the May Revision — proposes even deeper cuts. The state’s general fund would plummet to $201 billion for the upcoming fiscal year that begins July 1, he said. Through the end of March, the state collected 4% less in tax revenue for the current fiscal year — amounting to about $5.8 billion — than what Newsom had projected just four months ago, according to figures from the his finance department. Those bleak numbers prompted Newsom and the state’s Democrat-controlled Legislature last month to agree to $17.3 billion in actions to reduce the shortfall, including $3.6 billion in cuts, $5.2 billion in borrowing, and other accounting measures that delay spending to subsequent years or shift costs to other state funds. California Revenue Forecasts Prove Faulty | Tax revenue forecasts in 2022 are expected to fall $165 billion short On Friday, Newsom said the deficit had grown from $38 billion to $44.9 billion as revenue continued to come in lower than estimated. But early actions by the governor and lawmakers to slash spending leaves the state with a $27.6 billion shortfall. “Unlike deficits of the past, the state’s underlying fundamentals are solid,” California Treasurer Fiona Ma said in an emailed statement. “The economy is strong, the agreed-upon early actions were real and significant, and the state has ample reserves and available cash to draw on if needed.” Drawing on Reserves Newsom’s plan calls for drawing down the state’s reserves by half — roughly $13.1 billion — to close the gap and cut $8.5 billion in spending from key priorities including climate change initiatives, housing and a scholarship program. His early proposal in January included a series of accounting maneuvers such as pushing $1.6 billion for the last payroll for state workers to be paid next year into the following fiscal year. In December he froze state spending. The governor has also said he will seek to change recently passed legislation setting a $25 minimum wage for health care workers by 2026. Newsom wants to make the wage hikes contingent on funding, which could delay the increases and save the state money in the near term. In February, the state’s non-partisan Legislative Analysts Office said Newsom’s January calculations were overly optimistic as data showed that tax receipts fell short of estimates. With a progressive tax system that takes in less revenue when the income of the highest earners declines, California saw its outlook weaken after a 2022 slump in the stock and bond markets. The deficit calculations were clouded by a rare delay in the tax filing deadline that concealed the size of the hole until late last year. Lawmakers now have until the state constitutional deadline of June 15 to pass a budget and send it back to Newsom. If they don’t they forfeit their salaries and travel and living expense reimbursements until the day that the budget is signed into law.
At least the millions of illegal aliens will still have taxpayer funded Housing, Healthcare, and EBT cards. That’s the most important thing…right Liberals?
The great mystery is why new Americans are treated differently to the old Americans. If the socialists treated everybody the same, as their ideology suggests, the homeless crisis would be solved overnight.
The millions of illegals crossing our open borders are getting more benefits in food stamps and welfare benefits than US citizens. Wait till the Democrat loyalists find out. They are being replaced if they have not realized it. Kamala Harris supports giving non-US citizens illegals the right to vote. No other country on the planet will even propose or tolerate more rights and benefits for foreigners including, the right to vote. How so far the US has fallen yet, Democrats and RINOs act like there is no problem.
Don't forget about the $6 trillion reparation fund and the billions in EV credits - priorities. Los Angeles is now trying to figure out who received the $20B in cash to double the homeless population over the last 5 years.
What a liar this guy is. When will these idiots get realistic and stop claiming California is some utopia with no problems? California is in deep trouble because the environmentalists & NIMBYs have essentially said you can't build anymore housing here. On top of that Pop 13 means there is no reason to sell your property unless you want to pay a lot more in property taxes when you move. Both the bay area & southland (LA & SD) have the same problem which is housing is too expensive. You simply can't grow your economy when there is no where to live. The same is true for the universities here, they don't build any more housing for their incoming students anymore. In 2022 the California Supreme Court ruled that UC Berkeley couldn't accept anymore students without building more housing but Newsom vetoed it.
Wait the illegal aliens are provided housing yet are also homeless. And prolly use the EBT cards to buy the veggies and fruits they pick. Also who do Californians have to thank for Prop 13, Libs? I don't think so.