California is struggling. Not only have thousands of residents fled the state in droves due to sky-high prices, record crime, homelessness, and radical policies, but the liberal state has also found itself in a massive budget hole.
To combat the state’s budget problem, Gov. Gavin Newsom (D-CA) wants to dip into California’s “rainy day” fund to help fill the hole that is the state’s $38 billion deficit.
This week, Newsom said he would declare a fiscal emergency if necessary so that California can return to a more normal budget after recent spikes in revenue. The Democrat called it a “story of correction” following the state’s shocking news at the end of 2022 when a $98 billion surplus collapsed into a $25 billion deficit.
The state’s $38 billion deficit is only half of the eventual amount and a shortfall, given a surplus of $100 billion that California was sitting on just a year prior.
Newsom proposed spending cuts to state programs that address so-called “climate change” and additional funds to help settle illegal migrants who have arrived in California after illegally crossing over the border into the U.S.
The governor’s plan to close the deficit also includes:
- Withdrawing $13.1 billion from the budget stabilization and safety net reserve accounts;
- Cutting $8.5 billion from existing programs and services, including climate, housing and education;
- Delaying $5.1 billion worth of spending, deferring another $2.1 billion to 2025-26, including about $500 million in additional funding for the University of California and California State University;
- $5.7 billion in internal borrowing from special funds to support the tax on health care providers.
Recommended
Newsom would also protect schools and community colleges by withdrawing about $7 billion from the $10.8 billion TK-14 rainy day fund to cover the current year’s shortfall and meet the minimum obligation in 2024-2025.
Former Gov. Jerry Brown (D-CA) created the state’s “rainy day” fund. However, it did not solve the budget problems at any time.
Recently, California announced that the state would provide Medi-Cal— the state’s version of Medicaid— to all residents, including illegal aliens.
Join the conversation as a VIP Member