SACRAMENTO, Calif. (AP) — California’s budget deficit is at least $45 billion, a deficit so large that it prompted Gov. Gavin Newsom on Friday to propose painful spending cuts that affect immigrants, preschoolers and low-income parents who often seek in-state child care. hailed for having the fifth largest economy in the world.
Officially, Newsom said the state’s deficit was $27.6 billion. But in reality, it’s closer to $45 billion if you include previous spending cuts that Newsom and the state Legislature agreed to in March. Including cuts to public education spending, which Newsom did not include, the deficit would amount to billions of dollars more, according to a recent analysis by the nonpartisan Office of Legislative Analysts.
The size of the deficit is important because it will shape the national outlook for Newsom, who is a top surrogate in President Joe Biden’s re-election campaign and is widely seen as nursing his own presidential aspirations. Newsom spent much of his time in the office basking in the glow of historic budget surpluses this allowed him to significantly increase state spending. But back-to-back budget deficits — and more on the horizon — are testing California’s commitment to these increases.
So far, Newsom has not taken back some of his most dramatic policy advances, including free preschool for all children aged 4 and free health insurance for all low-income adults, regardless of immigration status. But as Friday’s proposal showed, Newsom is willing to walk back some of those promises to balance the budget.
While Newsom hasn’t cut anyone’s health insurance, he has proposed the state stop paying health care workers to care for some 14,000 disabled immigrants in their homes. This would save the state $94.7 million. While he has not backed away from the state’s commitment to expanding kindergarten, he has proposed eliminating $550 million that would have helped school districts build the facilities that they need to teach all these extra students.
After promising to fund child care for an additional 146,000 children from low-income families, Newsom on Friday proposed pausing that expansion at 119,000. And after promising to increase the amount of money available to the doctor treat Medicaid patientsNewsom proposed Friday canceling $6.7 billion that had been set aside to do so.
The budget cuts have sparked outrage across the political and ideological spectrum. Anthony Wright, executive director of the consumer advocacy group Health Access California, said cutting home care for immigrants with disabilities would result in these people becoming “even poorer or ending up in nursing home care a lot more.” more expensive “.
Yolanda Thomas, a member of the Child Care Providers United negotiating team, said cutting child care slots means “we cannot build a stronger economy when our lowest paid workers… have no safe place to send their children during their shift. »
For every question on Friday, Newsom had a similar answer.
“I prefer not to make this cut. These are programs, proposals that I have been putting forward for a long time, and a lot of them,” he said. “But you have to do it. You have to be responsible. »
Before the coronavirus pandemic, California’s revenues were growing about 5% annually. From 2019-20 to 2021-22, revenues increased by 55%. That’s because California received a lot of money from the federal government to mitigate the impact of the pandemic. And that’s because the stock market has seen historic gains, fueling a rapid expansion of wealth among California’s wealthiest residents, generating a a tax windfall for the state.
State budgeting is a guessing game, in which governors and lawmakers must predict how much money they will have and plan to spend it. After the bountiful years of the pandemic, California’s predictions are far from accurate. The Newsom administration now projects that state revenue will be $83.1 billion less than it thought for fiscal years 2022-23 and 2023-24.
“If you knew these revenue levels were unrealistic and completely unsustainable, why wouldn’t you put a little more in reserves,” said State Sen. Roger Niello, a Republican and vice chairman of the Senate Budget and of the review of public finances. . “If that’s the case, you know it’s going to collapse and you’ll have a big deficit to cover.”
Newsom defended California’s previous budget measures, highlighting the State Constitution required the state to return a large part of this surplus to taxpayers in the form of rebates. Newsom said he was “providing a lot of support at the time to people who needed money.”
“I feel like we were doing the best we could under the circumstances,” he said.
Newsom repeatedly promised Friday that he would not sign a sweeping personal tax increase. But he proposed suspending a popular tax deduction for businesses that many view as a tax increase.
In total, Newsom is proposing $32.8 billion in cuts over two years, including the elimination of 10,000 unfilled state jobs and an 8% reduction in state operations — including things like removal of landlines. He promised there would be no layoffs, furloughs or pay cuts for the state’s more than 221,000 public employees.
Democratic lawmakers applauded Newsom’s efforts to address several years of deficits and pledged to protect spending on social safety net funding and classrooms.
“No one knows what challenges California may face, so we must always stay prepared,” Assembly Speaker Robert Rivas and Assembly Budget Chairman Jesse Gabriel said in a joint statement . ___ This story has been corrected to show that Newsom proposed cutting $550 million for school facilities, not $500 million.
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News Source : apnews.com
