Newsom Releases His Revised May Budget
Sonora, CA – In announcing his revised May budget for the 2023–24 fiscal year, Gov. Gavin Newsom disclosed that California’s budget deficit has grown to nearly $32 billion.
That is an additional $10 billion more than Newsom predicted the deficit would be in his first budget proposal in January. The governor pointed to high inflation and a decision to let most people delay filing their taxes after a series of damaging winter storms. Newsom’s overall budget proposal is for $306 billion, the largest state budget in the nation.
Additionally, California uses a progressive tax code that relies on wealthy taxpayers whose income is closely tied to the stock market’s performance, which has been volatile. Regarding whether raising taxes was an option, Newsom replied, “I do not think it is the right time to raise taxes when you’re enjoying a $177 billion operating budget over the last 24 months and you just sent $18.1 billion in tax rebates. I don’t think it’s the right thing to do. We’re able to submit a budget that we think is prudent and balanced.”
To make up the deficit, the governor’s latest proposal would cut another nearly $1 billion in spending, some from unspent money in various programs, including those designed to provide tax refunds and help people with their utility bills. The rest would be accomplished by shifting expenses, taking some money from the state’s safety reserve, and borrowing.
“This was not an easy budget, but I hope you see we will try to do our best to hold the line and take care of the most vulnerable and most needy, but still maintain prudence,” noted Newsom.
Republicans are blasting this budget as another marker of irresponsible spending by the Democrats who control Sacramento. Republican Assembly Leader James Gallagher said in a statement
“His cuts to drought programs are dangerous, his “fiscal gimmicks” are shortsighted, and his words about good government and efficiency are yet another empty promise. Californians deserve better.”
Newsom added that he does plan to restore money for flood protection projects and is spending another $250 million on other flood projects. In contrast, California Farm Bureau President Jamie Johansson praised the Newsom budget, calling it “thoughtful.”
“We are pleased by the state’s important investments in flood-protection measures and in agricultural business grants. We also applaud the governor for his earlier executive order to streamline permitting for needed groundwater recharge.” Johansson added, “We must continue to build our water storage infrastructure to enable us to store water in wet years for dry years. We also must continue to make thoughtful policy decisions to protect and enhance opportunities for California’s critical food producers.”
These budget numbers could change again as the delayed tax collection until October 18th means Newsom and lawmakers will have to make a budget plan without knowing how much money they have to spend.
