Governor Newsom Unveils Plan to Address $44.9 Billion Budget Deficit in California
In response to the unprecedented $44.9 billion budget deficit facing California, Governor Gavin Newsom has announced a plan to shrink the size of state government. The plan includes cutting 10,000 vacant state jobs, pausing the expansion of subsidized childcare, and reducing funding for climate change programs.
California’s revised $288 billion budget proposal projects a $7 billion increase in the deficit from January’s estimates. Newsom’s plan relies on $17.3 billion in savings from budget cuts and using $4.2 billion from the state’s rainy day fund. Proposed spending reductions include cuts to programs related to fighting climate change and expanding internet connectivity.
The budget plan has been described as incomplete compared to prior years, with a limited summary released on Friday. The deficit number continues to change due to poor revenue forecasts and delays in federal income tax deadlines.
Education funding under Proposition 98 may be reduced, with cuts to early childhood programs and scholarship programs. Healthcare cuts include the elimination of public health funding, training programs for health workers, and extra pay for Medi-Cal providers.
To save $80.6 million, the plan includes the closure of housing units at 13 state prisons and deactivation of units. Workers may also be affected by the plan, with the deletion of 10,000 vacant state jobs and potential delays in implementing a minimum wage increase for healthcare workers.
As California grapples with the economic fallout from the COVID-19 pandemic, Newsom’s plan aims to address the budget deficit while making tough decisions on spending cuts. Stay tuned for further updates on how the state plans to navigate these challenging financial times.
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