‘Californians deserve better’: Newsom announces state’s $32B budget deficit, $10B more than estimated

California Governor Gavin Newsom announced on Friday that the state’s budget deficit has exceeded the previous estimate by a staggering $10 billion, bringing the Golden State’s shortfall to nearly $32 billion.

“We have a $31.5 billion challenge, which is well within the margin of expectation and well within our capacity to address,” Newsom said during a press conference.

(Video: YouTube)

Back in January, when the Golden State was expected to see a mere $22.5 billion budget deficit, the liberal governor proposed $9.6 billion in spending cuts, slicing into, among other policy plans, some of California’s progressive climate programs to handle the shortfall, Fox News reports. Under his revised proposal, approximately another $1 billion would be slashed from spending.

California has a lot of programs, and some of that belt-tightening will come from scraping together unspent money from those, for example, that would assist Californians with paying their utility bills and provide tax refunds.

“He’s making up the rest of the deficit by shifting expenses, taking some money from the state’s safety net reserve and borrowing,” according to Fox News.

“This was not an easy budget,” Newsom said, “but I hope you see we will try to do our best to hold the line and take care of the most vulnerable and most needy but still maintain prudence.”

In a press release, Newsom’s office said the governor was totally prepared for a higher-than-estimated shortfall.

“Following two years of unprecedented growth, revenues have fallen short of monthly estimates since the 2022 Budget Act was enacted last June,” it said. “California has planned for this potential shortfall, with the Governor and Legislature paying down the state’s prior debts, building unprecedented reserves and prioritizing one-time investments.”

At the press conference, Newsom stressed the value of his “transformative efforts.”

“In partnership with the Legislature, we have made deep investments in California and its future – transformative efforts that will benefit generations of Californians, and that this budget will continue to guide as we navigate near-term ups and downs in revenue,” he said. “As we prepare for more risk and uncertainties ahead, it’s critical that we keep the state on a solid fiscal footing to protect Californians and our progress in remaking the future of our state.”

In a statement, Republican Assembly Leader James Gallagher blasted Newsom’s “fiscal gimmicks.”

“His cuts to drought programs are dangerous, his ‘fiscal gimmicks’ are shortsighted and his words about good government and efficiency are yet another empty promise,” Gallagher said. “Californians deserve better.”

At $306 billion, California boasts the largest budget in the nation, but it is one of just a few states that are facing a shortfall this year.

“Some say it is due in part to a progressive tax code that relies on wealthy taxpayers whose income is closely tied to the performance of the stock market,” Fox News reports.

But, regardless of how it is spun, the mind-boggling budget deficit represents a crow-eating moment for Newsom. The ambitious governor once enjoyed bragging about California’s surplus. In February 2020, when there was a $21.5 billion surplus, he claimed it was the reason that Donald Trump is “scared of CA.”

“We’re the progressive answer to his regressive policies,” he told the unlikeable ladies of “The View.”

And in January 2022, Newsom claimed California was the “model” for the nation to follow.

“With a surplus of over $45.7 BILLION — California is a model for the nation on how we can confront our greatest existential threats and make historic investments in our future,” he proudly tweeted. “We can lead with science and still have a successful economy.”

Exactly one year ago today, the Los Angeles Times reported that California’s surplus was “expected to hit [an] unprecedented $97 billion under Newsom’s budget plan.”

“No other state in American history has ever experienced a surplus as large as this,” Newsom said at the time.

With his revised budget proposal, people are now saying, “he’s destroyed that state.”


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Melissa Fine


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