Gov. Gavin Newsom on Thursday laid out his proposal to slash billions in spending to tackle a massive $54.3 billion deficit in the state budget.
Before COVID-19, the state had a $6 billion surplus. State tax revenue has taken a huge hit as a result of the pandemic. Newsom said dealing with budget woes will require a multi-year strategy.
The governor’s May budget revision includes the following:
- Use all $16 billion in the state rainy-day fund over the next three years.
- Borrow and transfer $4.1 billion in special funds
- Cancel $6.1 billion in spending increases
Newsom has also proposed a 10% pay cut for all state workers starting July 1.
On schools, Newsom is relying on roughly $4 billion in federal coronavirus funding as one way to bring in more money. The proposed budget decreases spending on K-12 education by nearly $7 billion compared to the 2019-2020 budget year.
Newsom said there are cuts that could be mitigated by the federal government and called on President Donald Trump to sign the HEROES Act.
Lawmakers are under a June 15th deadline to pass a budget is June 15. It could, however, be amended later as conditions change.
