26 C
New York
Monday, June 24, 2024

New California budget plan to cover state’s $32 billion deficit without touching state reserves

California Gov. Gavin Newsom and the Democrats who control the state Legislature agreed late Monday on how to spend $310.8 billion over the next year, endorsing a plan that covers a nearly $32 billion budget deficit without raiding the state’s savings account.

The nation’s most populous state has had combined budget surpluses of well over $100 billion in the past few years, using that money to greatly expand government.

But this year, revenues slowed as inflation soared and the stock market struggled. California gets most of its revenue from taxes paid by the wealthy, making it more vulnerable to changes in the economy than other states. Last month, the Newsom administration estimated the state’s spending would exceed revenues by over $30 billion.

The budget, which lawmakers are scheduled to vote on this week, covers that deficit by cutting some spending — about $8 billion — while delaying other spending and shifting some expenses to other funds. The plan would borrow $6.1 billion and would set aside $37.8 billion in reserves, the most ever.

“What do Capitol Democrats have in store for you this holiday weekend? Higher gas prices!” Assembly Republican Leader James Gallagher posted on Twitter.

California Gov. Gavin Newsom

California Gov. Gavin Newsom speaks during a news conference on May 25, 2023, in Richmond, California. Newsom and state legislative leaders have reached an agreement on how to spend the state’s tax dollars over the next year. (AP Photo/Adam Beam, File)

Budget talks stalled over the weekend as Newsom sought major changes to the state’s building and permitting process. Newsom said the changes are needed to speed up vital construction projects, including expanding the state’s energy capacity and upgrading the state’s aging water infrastructure.

But a group of lawmakers from the Central Valley feared Newsom was using the proposal to push through a long-delayed project to build a giant tunnel to send water to Southern California. In the end, Newsom got most of the changes he wanted — but lawmakers made sure the changes wouldn’t benefit the tunnel project.

Democratic state Sen. Steve Glazer said he would oppose any toll increase, saying in a statement “Transit riders and taxpayers have witnessed first hand the trail of broken promises by advocates for bridge toll increases.”

“The status quo is failure and we should not put in another penny to support it,” he said.

CLICK HERE TO GET THE FOX NEWS APP 

Related Articles

Stay Connected

1,520FansLike
4,561FollowersFollow
0FollowersFollow

Latest Articles