By Peyton Sorosinski. Media: Washingtonexaminer
California’s Legislative Analyst’s Office announced Tuesday the state’s budget deficit is much larger than Gov. Gavin Newsom’s (D-CA) projected $38 billion shortfall.
In the report, the state’s newly confirmed $73 billion deficit is $15 billion more than the $58 billion the office previously projected when Newsom introduced his budget in January.
“Roughly, a $24 billion erosion in revenues corresponds to a $15 billion increase in the budget problem. This would expand the $58 billion estimated deficit to $73 billion under our updated revenue forecast,” the report stated.
The report listed several places where spending cuts can be made in order to obtain an estimated $16 billion in savings to help state lawmakers balance the budget. The report proposed possible budget solutions such as increasing revenue, cutting back on one-time and ongoing spending, and using reserves or cost shifts.
Based on the analysis, cuts could be made to education, criminal justice, labor, health and human services, housing and homelessness, and environment and transportation.
H.D. Palmer, a spokesman for the governor’s Department of Finance, reassured that the state was still anticipating $51 billion in income and tax receipts.
“No one can say today with certainty how those numbers may change the budget estimate of a $38 billion shortfall,” Palmer said in a statement. “A responsible step would be for the Legislature to act now on the early action budget measures needed for $8 billion in solutions to help close this gap.”
State Republicans ripped Newsom for his deficit projection and seized the results of the report to capitalize on the governor’s “wasteful spending.”
“Today’s announcement isn’t surprising at all,” Republican state Sen. Brian Dahle said in a statement. “We’ve seen wasteful spending for years and Republicans have been sounding the alarm. Sadly, this deficit will continue for years to come as bad policies drive taxpayers out of this state. Newsom needs to stop campaigning for president and focus on serving the people of California.”
“How are we supposed to balance the budget when our governor can’t even admit the true size of the deficit his administration racked up?” state Senate Minority Leader Brian Jones added in a separate statement.
Last month, Jones pleaded with Democratic lawmakers and Newsom to freeze Medi-Cal for undocumented immigrants to help curb the state’s looming budget deficit.
In January, Newsom proposed his budget. He sought to close the deficit by dipping into reserves, reducing overall spending, and delaying the minimum wage increase.
A revised budget will be released in May, according to the report.
