California Governor Gavin Newsom needs to eliminate a $73 billion budget deficit by the end of June, but some lawmakers and analysts say the governor’s “mismanagement of the state’s finances” has caused the problem. claims.
In 2022, Newsom will $301 billion budget It was enacted into law and boasted a surplus of $97 billion. The budget, nearly triple the size of the previous fiscal year, included billions of dollars to tackle climate change, combat homelessness and education. But two years later, the deficit had ballooned.
Democratic lawmakers reached an agreement Friday to reduce the state’s multibillion-dollar budget deficit by $17.3 billion through a combination of spending cuts, deferrals and postponements, although the deal was agreed to behind closed doors and Republicans. Lawmakers quickly labeled it “bullshit.”
“This latest deal that he’s touting is all dependent on budget mechanics, and there are going to be changes and delays. When you look at the numbers, it’s clearly not enough,” said Vince, vice chairman of the Budget Committee. Fong told FOX News Digital. “We have a sustainability problem. We have an overspending problem in California, and there’s nothing the governor is addressing.”
California Democrats reach $17.3 billion deficit reduction deal
California Governor Newsom will speak in San Francisco on November 9, 2023. The governor is scheduled to unveil a plan to address California’s large deficit on Wednesday. (AP Photo/Jeff Chee, File)
This agreement came after the previous Newsom sent a letter It urged state officials to “take immediate action to reduce spending and identify any operational savings achieved” as damage control.
“We look forward to working together to take this major step to address the shortfall with a balanced approach that meets the needs of Californians and maintains a strong fiscal foundation for the state’s future,” Newsom said in a statement Friday. We appreciate the cooperation of our legislative leaders.”
Although Newsom originally predicted in January that the budget shortfall would be only about $37.9 billion, the state’s bipartisan allies say Legislative Analyst Office (LAO) He predicted that amount would nearly double by next month. Historically, LAO data has been more accurate for the state’s economic outlook, said Fong, who has served on the state’s budget committee for nearly a decade.
“Throughout this whole mess, I have been warning the governor about the growing budget problem, as the governor continues to push for budgets that are becoming increasingly unsustainable,” Fong said. Told.
An economic slowdown caused by recent statistics showing the highest unemployment rate in the nation. increase in employment The Golden State’s 2023 population was much lower than previously thought, which is the main reason for the shortfall. Another factor is the exodus of businesses and residents from the state to states with more tax-friendly policies. California relies heavily on income taxes for revenue.
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California experienced the first population decline in history in 2020, when states imposed strict lockdowns during the coronavirus disease (COVID-19) pandemic. From January 2020 to July 2022, the state lost well over 500,000 people, with nearly 700,000 people moving out and moving in.
Republican state Rep. Kevin Kiley, one of Newsom’s biggest critics in Congress, told Fox News Digital that another factor in the cost is the state’s aggressive policy of providing taxpayer-funded health care to undocumented immigrants. He said that it is a great promotion.
“The state is the only one that is saying we are illegally giving taxpayer dollars to everyone who lives in this state,” Kiley told Fox News Digital. “California is a true example of what not to do when it comes to managing state finances, taxing and spending.”
July 17, 2022 at the California State Capitol in Sacramento. (Myung J. Chun/Los Angeles Times via Getty Images)
John Coupal, president of the Howard Jarvis Taxpayers Association, a California-based taxpayer advocacy group, said the state is “totally condemning” the wealthy, “a significant number of whom are retired.”
“If you’re wasting money, it’s easy to end up in the red,” Coupal told Fox News Digital. “From a taxpayer perspective, I think this problem is obviously just a few decades of overspending, but the budget has essentially doubled in six years, and the state… We’ve adopted all kinds of new programs that we haven’t had before.” ”
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Will Swaim, president of the conservative think tank California Public Policy, told Fox News Digital that the bloated budget is “insanity in the world of finance.”
“He claimed we had a historic budget surplus in 2022, but we completely reversed course because spending exceeded revenue,” Swaim told FOX News Digital.
Rep. Kevin Kiley (Scott Strazzante Pool/Getty Images)
The new agreement with Democrats, who hold supermajorities in both chambers, includes many proposals that Newsom and the state Senate put together earlier this year. The plan calls for $3.6 billion in mostly one-time funding cuts to some schools, human services and climate change programs, and a previously proposed $1.2 billion in housing and homelessness programs. Reductions are excluded. The plan also defers or postpones about $5.2 billion in spending for a variety of programs, including public transportation and facilities for preschools. It also gave Newsom the authority to freeze additional one-time funding included in the past three years’ budgets.
The governor’s office pointed to Fox News Digital comments Newsom made in January dismissing criticism.
“California is the tentpole of the American economy, in terms of America’s recovery, in terms of job creation, innovation, and entrepreneurship. … More scientists, researchers, and Nobel Prize winners than any other state in America. We have award winners, we have engineers, we have patents. We are the fastest growing economy in the last five years, so I respectfully dismiss that story.”
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Bradford Betts and Joe Schofstall of The Associated Press and FOX News contributed to this report.
