California Gov. Newsom Spending Plans and Priorities
Gov. Newsom is facing a California Constitutional requirement to submit a balanced budget for the next fiscal year beginning July 1st. Newsom cannot raise taxes because sky-high state tax rates are driving the rich to move to low cost states. With revenue continuing to decline, here are his spending plans and priorities.
Newsom’s Department of Finance estimated deficit for this year ending June 30th is $38 billion, versus the nonpartisan California nonpartisan Legislative Analyst’s Office estimate of $73 billion. That was before another $7 billion shortfall in April 15th tax drop.
Newsom in late April engaged in what he called “early action” to reduce the deficit by more than $17 billion. But the actions tended to rely on more optimistic tax collection, internal borrowing, and delayed funding shifts for those savings. Republican legislators called the moves “gimmicky” and “balanced on hopes and prayers.”
Since Newsom has pledged to balance the budget with “no new taxes,” he plans to cut general fund spending that includes special funds and bond payments from $310.8 billion this year to $288.1 billion next year. If you believe his math, he will have enough state “rainy day fund reserves” to cover the projected 2024-2025 deficit of $27.6 billion and the projected $28.4 billion deficit for the following 2025-26 year.
The Mountain Top Times most recent estimate for California general fund and fee revenues for the next year totaled $237.5 billion. We estimate that Newsom’s proposed budget for the coming year will still have a $40.6 billion deficit.
Newsom’s additional budget savings to “balanced the budget include:
$8.4 billion from a K-12 school reserve account to stabilize education in each of the next two years.
$1 billion from eliminating 10,000 unfilled state positions.
$19.1 billion from clawing back unspent project funding approved in 2021-2023.
$13.7 billion by cutting state scholarships and public health plans, plus closing prisons to eliminate 4,600 inmates.
$2.2 billion by increasing bureaucrat efficiency.
Newsom refuses to cut social spending for welfare, the earned income tax credit, and supplemental income for elderly and disabled Californians. Newsom also intends to continue what he calls his new “foundational” funding for “undocumented workers” of all ages that began providing free Medi-Cal coverage on January 1, 2024
Chriss Street is the Editor of the Mountain Top Times
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I do not see an end to this overspending this supposed elected governor & his administrations practices . We need to educate voters and vote these PEOPLE OUT OF OFFICE & never let them get back in again !!!!