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California Governor Newsom Announces Budget

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Sacramento, CA– In a press conference on Wednesday, California Governor Gavin Newsom revealed that the state’s budget deficit is not as dire as initially feared, though substantial enough to potentially hinder a scheduled minimum wage increase for over 400,000 healthcare workers. The fiscal shortfall may also lead to cutbacks across various housing and climate programs.

The proposed budget is $291 billion. He said the deficit is around $37 billion, which is lower than the non-partisan Legislative Analyst’s recent estimate of $68-billion. The governor is proposing to draw $13 billion from the state’s reserves to cover some of the deficit. He’s also proposing $8.5 billion in spending cuts.

Despite the budget constraints, Newsom affirmed his commitment to maintaining some spending initiatives, such as universal free kindergarten for 4-year-olds and health insurance coverage for low-income adults irrespective of immigration status. However, he proposed the idea of postponing the planned minimum wage increase for healthcare workers during budget-tight years, a measure he claimed legislators had previously agreed to when the law was enacted last year. While refraining from labeling the deficit a “crisis,” Newsom’s strategy to address it involves tapping into over $13 billion from the state’s reserves, prompting him to declare a “fiscal emergency.” The proposed plan includes $8.5 billion in spending cuts, with approximately half directed toward housing and climate programs.

In response to the budget proposal, Assembly Republican Leader James Gallagher of Yuba City issued a statement emphasizing the need to rein in California’s budget without resorting to accounting maneuvers or education cuts. Gallagher underscored the importance of returning the government to essential functions and eliminating wasteful spending on an inefficient and unaccountable bureaucracy.

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