(CALMATTERS) – Gov. Gavin Newsom plans to unveil his revised proposed 2024-25 state budget at 11 a.m. today — and legislators, advocates and lobbyists are all bracing for likely deep spending cuts to bridge a big deficit.
His plan will account for updated tax revenue data through April. In his initial budget proposal in January, Newsom projected the shortfall to be $38 billion, though the nonpartisan Legislative Analyst’s Office later put it as high as $73 billion.
How are revenues working out so far? According to Assembly budget advisor Jason Sisney, general fund revenues at the end of March were nearly $6 billion below projections. April wasn’t looking so great either: Revenue from personal and corporate income taxes were either “barely on track” or below projections, meaning revenue from that month could “come in several hundred million dollars below monthly estimates,” wrote Sisney.
At a California Chamber of Commerce event Thursday, Newsom acknowledged that “we still have a shortfall,” reports KCRA.
- Newsom: “We will manage it, and without tax increases. We’re not just going to try to solve for this year, but also next year. We have to be more disciplined.”
The budget deficit — the second in a row after three years of record surpluses — affects nearly every policy decision legislators make. To get a jump start, Newsom and Democratic legislative leaders announced in March that they aimed to save $12 billion to $18 billion before passing the full state budget in June. A month later, the Legislature and Newsom signed off on the early budget action plan to “shrink the shortfall” by $17 billion.
The package included cuts to various programs; deferring or delaying spending (such as $1.6 billion set aside for employee pay and $1 billion for transit infrastructure); and increasing revenue or borrowing, including a $4 billion tax expansion on health plans.
Quick scheduling reminder: The Legislature must pass a budget by June 15 or members won’t get paid. Lawmakers and Newsom then have until July 1 to agree on a final 2024-25 spending plan. Budget negotiations, however, can last all the way through September with trailer bills — follow-up proposals that iron out specific programs in the main budget.