Current:Home > MyEthermac|California lawmakers vote to reduce deficit by $17 billion, but harder choices lie ahead -Nova Finance Academy
Ethermac|California lawmakers vote to reduce deficit by $17 billion, but harder choices lie ahead
EchoSense View
Date:2025-04-10 17:30:09
SACRAMENTO,Ethermac Calif. (AP) — California lawmakers don’t know for sure how big their budget deficit is, but on Thursday they decided it’s big enough to go ahead and reduce spending by about $17 billion.
The vote represents a preemptive strike from Democratic Gov. Gavin Newsom, who is trying to get ahead of a stubborn shortfall that has been increasing every month and will likely extend into next year and beyond — when the second-term governor could be eyeing a campaign for the White House.
In his first term in office, Newsom enjoyed a series of historic surpluses and oversaw a vast expansion of government services. But that growth ended last year, when the state had a shortfall of nearly $32 billion.
Things got worse in January when Newsom announced another deficit of $38 billion. The nonpartisan Legislative Analyst’s Office said the shortfall was actually $58 billion because they said Newsom should have included some reductions in public education spending. Then in February the LAO updated its deficit estimate to $73 billion after state revenues continued to come in below projections.
Since then, Newsom and his Democratic allies in the state Legislature have been doing everything they can to make that deficit smaller. Last month, they raised a tax on the companies that manage the state’s Medicaid program to bring in an extra $1.5 billion.
There were no headline-grabbing cuts in the reductions lawmakers approved on Thursday. Despite California’s recent budget woes, the Democrats in charge have refused to raise income taxes or impose steep cuts to the most expensive programs, including health care and public education.
Instead, most of the savings comes from either cancelling or delaying spending that was approved in previous years but hasn’t yet been spent. It also relies on a number of accounting tricks to make the shortfall appear smaller, including shifting paychecks for state workers by one day from June 30 to July 1 so the state can count $1.6 billion in salaries for the next fiscal year.
By doing this, Democrats are betting California’s budget problems are only temporary. The state is known for wild swings in revenue, especially given its overreliance on wealthy taxpayers who make most of their money from the stock market.
“We’re trying to make thoughtful choices here,” said Jesse Gabriel, a Democrat and chair of the Assembly Budget Committee. “At the same time, from my perspective one of the worst outcomes here would be to make a cut to a critical program that serves our most vulnerable folks and to later realize that you didn’t need to make that cut.”
Republicans have long complained about Democrats’ approach to the budget deficits, arguing lawmakers should make structural changes to the state’s spending to better align with the reality of the state’s revenues. On Thursday, Republican Assemblymember Vince Fong declared it “only pushes this crisis into the future.”
Still, Democrats have been saying for months they will likely be forced to make “tough decisions” on the budget later this year. The LAO has projected a deficit of $30 billion next year, which would be the third consecutive year of a multibillion-dollar shortfall.
“We’re not going to solve this problem anymore by just stopping one-time spending,” Democratic Assemblymember Cottie Petrie-Norris said.
veryGood! (76711)
Related
- Have Dry, Sensitive Skin? You Need To Add These Gentle Skincare Products to Your Routine
- Hooters closes underperforming restaurants around US: See list of closing locations
- Most Americans plan to watch Biden-Trump debate, and many see high stakes, AP-NORC poll finds
- 5 people killed, teen girl injured in Las Vegas apartment shootings; manhunt ends with arrest
- In ‘Nickel Boys,’ striving for a new way to see
- Israelis’ lawsuit says UN agency helps Hamas by paying Gaza staff in dollars
- Supporters of a proposed voter ID amendment in Nevada turn in thousands of signatures for review
- Judge blocks Michigan’s abortion waiting period, 2 years after voters approved abortion rights
- Grammy nominee Teddy Swims on love, growth and embracing change
- Judge sets $10M bond for second Venezuelan man accused of killing a 12-year-old Houston girl
Ranking
- New data highlights 'achievement gap' for students in the US
- Olympic track and field seeing dollar signs with splashy cash infusions into the sport
- Biden and Trump are set to debate. Here’s what their past performances looked like
- 2024 NBA draft features another French revolution with four players on first-round board
- Meet first time Grammy nominee Charley Crockett
- No evidence new COVID variant LB.1 causes more severe disease, CDC says
- Supreme Court rejects Josh Duggar's child pornography appeal
- New Jersey man flies to Florida to attack another player over an online gaming dispute, deputies say
Recommendation
Pregnant Kylie Kelce Shares Hilarious Question Her Daughter Asked Jason Kelce Amid Rising Fame
Love Blue Bell ice cream? You can vote for your favorite discontinued flavor to return
Totally Cool recalls over 60 ice cream products because they could contain listeria
Travis Kelce reveals how he started to 'really fall' for 'very self-aware' Taylor Swift
Whoopi Goldberg is delightfully vile as Miss Hannigan in ‘Annie’ stage return
Homeland Security says border arrests fall more than 40% since Biden’s halt to asylum processing
Maui leaders target vacation rentals in proposal to house more locals
Lily Gladstone, Da’Vine Joy Randolph, 485 others invited to join film academy