7/25/2023 0 Comments Raising work venture towns![]() ![]() ![]() Newsom called it a “modest shortfall” and proposed to delay billions of dollars in spending commitments, reverse recent steps to shore up the state’s fiscal health and shift around funding sources to limit program cuts.Įnduring high inflation, turmoil in the regional banking sector and a showdown in Washington, D.C., over raising the federal debt limit have all deepened the economic headwinds. Extensive savings would remain largely untouched, though Newsom did propose to make a $450 million withdrawal from one reserve account.Ĭalifornia’s fiscal picture has largely worsened since January, when finance officials projected the state would face a deficit of $22.5 billion. Under the governor’s plan, the state would also borrow $1.2 billion from special funds and extend a $2.5 billion tax on managed care health plans to address the spending gap. Newsom proposes to close the deficit by shifting an additional $3.3 billion in existing commitments out of the general fund, including paying for $1.1 billion in climate spending and $1.1 billion in college student housing projects with bonds, and pulling back another $1 billion in unused money from programs such as middle class tax refunds and utility bill support for low-income residents. “We have a $31.5 billion challenge, which is well within the margin of expectation and well within our capacity to address,” Newsom said.ĭespite the growing shortfall, California’s overall budget is now expected to be $306 billion, including special funds, less than a 1% decline from a record $308 billion in the current fiscal year. Gavin Newsom announced today, though the governor downplayed the severity of its potential impact on critical government services and programs.ĭuring a press conference at the California Natural Resources Agency in downtown Sacramento, Newsom unveiled a revised spending plan that will rely on some additional fiscal maneuvers - including shifting funding sources and internal borrowing - to address a projected $31.5 billion gap in the 2023-24 state budget. California’s estimated budget deficit has grown by $9 billion since January, Gov. ![]()
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