California Democratic lawmakers have reportedly announced a proposal to help close the state’s $78 billion budget deficit, which includes Gov. Gavin Newsom’s (D-CA) plan to dip into reserves.
Last month, the state’s Legislative Analyst’s Office released a report revealing that Newsom’s projected $38 billion budget deficit was actually $73 billion. This led to conflicting budget shortfalls, with the governor insisting not to rely solely on the Legislative Analyst’s Office’s larger estimate, the Sacramento Bee reported.
Democratic state Sens. Mike McGuire and Scott Wiener proposed an “early action” plan that includes $17 billion in program cuts while opposing Newsom’s proposal to dip into rainy day funds to cover the remaining shortfall. According to McGuire’s statement, the proposal would reduce the budget shortfall range “to a more manageable” $9 billion to $24 billion.
“The deficit we’re facing this year will require big solutions, and I appreciate the Senate’s plan to close California’s budget deficit by $17 billion,” Newsom said in a statement. “I look forward to seeing this proposal move forward quickly.”
Newsom’s office did not respond to the Washington Examiner’s request for comment regarding his use of reserves to cover the deficit leftovers.
In the Legislative Analyst’s Office’s initial report, the office suggested ways spending cuts could be made to help close the deficit. Among the recommendations were strategies to reduce one-time and ongoing spending, as well as using reserves or cost shifts. Cuts could be made to criminal justice, education, health and human services, housing and homelessness, and environment and transportation, according to the report.
“The Senate’s plan to shrink the shortfall protects core programs, includes no new tax increases for Californians, makes necessary reductions, and takes a prudent approach to utilizing the Rainy Day Fund so we can be prepared for any future tough times,” McGuire said in a statement.
Chairman of the Budget Committee Jesse Gabriel told the Sacramento Bee that Newsom’s plan to use the state’s reserve funds to make up the difference in the shortfall “sounds about right.”
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However, Gabriel was reportedly unclear when asked at a press conference last week whether he supported the Legislative Analyst’s Office’s suggestion to close down five state prisons to save $1 billion.
In January, Newsom announced his $291.5 billion budget plans, which included using the state’s reserves and delaying spending to close his projected $38 billion deficit. Following his proposal, the Legislative Analyst’s Office supported Newsom pulling $13 billion from reserves, leaving $11 billion in the state’s rainy day funds, and would require him to declare a budget emergency to do so, according to CalMatters.