California's budget deficit has soared to nearly $32 billion, Gov. Gavin Newsom said.
California's budget deficit has soared to nearly $32 billion, Gov. Gavin Newsom said Friday as he announced a plan that would cover the shortfall this year while potentially leaving the state with multibillion-dollar deficits in the future.
Unlike the federal government, California must pass a balanced budget every year - meaning the state's revenue and expenses must be the same. Newsom's budget is balanced this year. But in the future, it would commit the state to spending more money than it is projected to have. Under Newsom's plan, the deficit would be $5 billion next year and grow to $14 billion by 2027.
That's why Newsom said it is common for future budgets to be unbalanced, especially during lean years. He also said Democrats, who control state government, have learned to use the volatile tax system to their advantage. Newsom's plan would leave California with $37.2 billion in various savings accounts, money that he said could be used to balance future budgets.
The governor has proposed about $700 million in cuts or spending deferrals by delaying money for programs that help nonprofits turn foreclosed property into affordable housing and clawing back money designated to turn commercial and industrial buildings into housing. Newsom signed off on an expansion of a subsidized child care program last year that would pay to help an extra 20,000 families. But he now proposes delaying that funding for one year, saying the state is having trouble filling its existing child care slots.
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