Gavin Newsom, the Democratic governor of California, unveiled a revised spending proposal to close a $32 billion budget gap.
According to the AP, the state’s deficit has increased by $10 billion since January. Although the state’s budget is in balance this year, the state has committed to spending greater amounts of money than it will collect from taxpayers in the years to come.
In the existing tax structure, 1% of the population contributes 50% of the state’s tax revenue. The state will collect more taxes while the economy and stock market are flourishing, but the affluent will pay less tax when the economy is about to enter a recession.
According to the news release:
“While the May Revision doesn’t foresee a recession, it does acknowledge heightened budgetary risks since January that have the potential to materially alter the state’s economic trajectory in the near future. As a result, the plan provides for $37.2 billion in overall budgetary reserves, $22.3 billion of which are in the Budget Stabilization Account.”
“This wasn’t a simple budget, but it’s my hope that you can see we will make every effort to do everything we can to hold finances in check and take extra steps to assist those who are most vulnerable and most needy, while still maintaining prudence,” Newsom added.
According to Fox News, Gov. Newsom’s most recent plan calls for a $1 billion cut in expenditure, with the remaining shortfall to be covered by borrowing and transferring funds out of the state’s safety net reserve.
Governor Newsom said that he was able to safeguard important items that were important to Californians, while Assembly Republican Leader James Gallagher claimed that Newsom’s amended budget plan will reduce important programs while continuing to support failed initiatives like High-Speed Rail.
According to a news release from Gallagher, “Only Gavin Newsom would be able to turn a $100 billion surplus to become a $31 billion deficit in just under a year. He is continuing to use the same strategy to bridging the budget shortfall. His ‘fiscal gimmicks’ are misguided, his cutbacks to drought relief programs are risky, and his statements about good governance and efficiency are just another hollow promise. Better is due to Californians.”
A week after Breitbart revealed that a California task group on reparations was going to cost a total of eight hundred billion, more than double the amount of the state’s budget, Newsom released his updated budget.