Agencies discuss what to cut as state deals with $35B deficit

(The Center Square) – In the face of California’s $35 billion-a-year budget deficit starting in the 2026-27 fiscal year, lawmakers and state agency heads are continuing discussions about budget cuts.

The California Department of Parks and Recreation wrote to The Center Square on Friday to say that the department’s budget cut proposal involves eliminating currently vacant positions.

“In determining which positions to eliminate, State Parks made every effort to spread reductions throughout the state to minimize impact,” Marty Greenstein, deputy director of communications and marketing for California State Parks and Recreation, told The Center Square in an email. “Careful consideration was given to maintaining core operations, with a particular focus on protecting the health and safety of visitors. State Parks continues to maintain vacant positions that remain available to be filled, allowing flexibility to address operational needs as resources permit.”

Those vacant positions that could be on the chopping block were discussed in a recent Assembly Budget Subcommittee meeting, where one legislator pushed back on the proposed cuts department officials suggested, saying that the relatively minimal cost savings aren’t worth the loss of programs and services.

“It seems that the general fund savings are trivial and the policy cost is enormous,” Assemblymember Cottie Petrie-Norris, D-Irvine, said at the meeting. “It seems to be to be penny-wise, pound-foolish. I don’t think the fiscal justification holds up as we more closely inspect it.”

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Only about $4.6 million in cost-cutting efforts were suggested by the budget reduction proposals from the California Department of Fish & Wildlife, Petrie-Norris told committee members. She also was concerned that officials from that agency said they are only meeting about 40% of its permitting and environmental protection mission.

“So that feels like we need to be doing more, not less,” Petrie-Norris said. “I certainly appreciate the need to tighten our belts, identify opportunities for savings, but particularly, with the [California Department of Fish and Wildlife] cuts, I really do not think this is the right decision, and I agree with the [Legislative Analyst’s Office] recommendation that we reject those proposals.”

Officials with the California Department of Finance told The Center Square that Gov. Gavin Newsom and his staff are still working on a revised draft of the governor’s budget, a version of which was released in January. Revisions to the governor’s proposal will be reflected in the May version of the Newsom’s budget, which state officials often refer to as “the May revise.”

“We haven’t landed yet on what decisions beyond January may be necessary in order to close a shortfall,” H.D. Palmer, deputy director of external affairs for the California Department of Finance, told The Center Square. “It will mean it does change relative to what we projected in January. People may be talking about potential scenarios, options, things of that sort, and I’m not going to get into what the governor may or may not be considering at this point.”

In January, the Governor’s Office projected only a $3 billion budget shortfall next year, well under the Legislative Analyst’s Office projections of an $18 billion shortfall in its budget released in November 2025.

Since that time, the conflict in Iran and an $8.6 billion increase in tax revenues have improved the budget outlook, but increasing costs in Medi-Cal spending has complicated the revenue picture, Palmer said. He noted nothing is final in the next version of the governor’s budget.

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Newsom made it clear in January that he is attempting to solve the budget problems not only in 2026-27, but the following fiscal year as well, Palmer told The Center Square.

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