Newsom and Democrats announce a plan to reduce the huge budget deficit. How? To be determined

(Rich Pedroncelli/Associated Press)

Newsom and Democrats announce a plan to reduce the huge budget deficit. How? To be determined

California politics, homepage news

Taryn Luna

March 21, 2024

With a budget deficit of at least $38 billion hanging over their heads, the government decides. Gavin Newsom and the Democratic leaders of the state Senate and Assembly announced an agreement Wednesday to take action in April to dramatically reduce California’s historic deficit.

The problem: Democrats in the Capitol couldn’t agree on an amount that was only between $12 billion and $18 billion, nor could they explain exactly what they plan to cut.

These details will be discussed and shared next month, the governor’s office said.

The shocking announcement of a plan to have a plan comes at a time when pressure is mounting on Democrats over the looming budget crisis.

Newsom has urged the Legislature to take “early action” to eliminate the deficit now well before the June deadline to pass a budget.


unused funding, delaying programs and reducing planned expenditures. The cuts currently under discussion are largely seen as the easier choices, hoping to give Democrats room to focus on tougher deliberations later this spring, when the full extent of the budget hole becomes clearer.

The Senate last week unveiled its own plan to shave $17 billion from the budget deficit with early cuts, including delaying and withdrawing more than $1 billion to expand early childhood education classrooms and support school facilities.

among other cuts

. But the Assembly, where Democrats hold 62 of 80 seats under a new speaker who has promised to give his members more input on major decisions, has been slower to rally behind a plan.

The struggle to reach a real consensus on the early cuts speaks to the challenge ahead as Democrats begin a process to correct the largest budget deficit state government has ever experienced. Some estimates suggest the deficit could be nearly twice as large as Newsom’s estimates, which will force lawmakers to make tough choices in May and June over programs that affect millions of Californians.

Democrats often approve an initial budget before the June 15 mandate required by state law and revise it again before the budget plan takes effect on July 15.

“In some ways I think this forces an earlier reckoning with the reality of what they’re actually going to have to vote on,” said Rob Stutzman, a longtime Republican strategist who worked for Gov. Arnold Schwarzenegger. “And they will possess it completely.”

While Republicans shared the pain of the Schwarzenegger-era budget crisis, Democrats now control the governor’s office and both houses of the Legislature by wide margins.

Only a handful of lawmakers have experience during previous budget crises, and Newsom has never been forced to make cuts of this magnitude.

His call for early deficit reduction drew mixed reactions from the Legislature, prompting Newsom to come to the Capitol this week for meetings with Senate Democrats and Assembly leaders in hopes of reaching a deal before leaving Sacramento for spring break. on Thursday. Lawmakers are expected to approve one of Newsom’s key budget proposals before the recess: a tax increase on managed-care organizations, allowing the state to attract more federal funds for health care.

In a statement announcing the agreement, California Senate President Pro Tem Mike McGuire (D-Healdsburg) said the Senate is prepared to take swift action on difficult budget decisions.

“The shortage is serious and has grown by billions since January. That’s why we must act quickly to reduce the deficit immediately,” McGuire said.

The Senate’s plan to cut $17 billion coupled with a desire to tap money

go inside

$12.2 billion from the Rain Day Fund could leave lawmakers with $29 billion less to compensate in June.

Newsom’s Treasury Department has said the governor’s administration supports the Senate package. But the Assembly has not yet provided details on how it plans to proceed.

House budget chairman Assemblymember Jesse Gabriel (D-Encino) held a news briefing Friday and said the Assembly appreciated the governor’s and Senate’s proposals but also needed more time.

“We appreciate the process and time to consider all of these considerations,” Gabriel said.

Gabriel said the Assembly intended to put forward its proposal


proposal April. He said he could expect the Assembly to take early action, but he also saw advantages in waiting until June to have more certainty about the size of the deficit.

In a statement released Wednesday vaguely announcing a coming agreement, Assembly Speaker Robert Rivas (D-Hollister) praised this as “an important first step” and said that “the Assembly is committed to a thoughtful , transparent budget process that benefits hard working Californians.”

But the lack of detail in the announcement about the cuts Democratic leaders are considering is an example of the opposite, Senator Roger said.


Niello, a Republican from Fair Oaks and vice chairman of the Senate Budget Committee, said in a statement. He called it ‘unilateral decision-making behind closed doors by one political party’.


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