(The Center Square) – Gov. Gavin Newsom, Senate President pro Tempore Toni G. Atkins, and Assembly Speaker Anthony Rendon have reached a state budget agreement for fiscal year 2023-24.
After weeks of negotiating to meet the looming June 30 deadline, the Democrat-controlled Legislature agreed on a $310 billion spending plan Monday and determined a way to cover the estimated $30 billion deficit with some financial maneuvering.
The budget shortfall was made up through a combination of borrowing, shifting funds, delaying spending and spending cuts and trigger cuts. With inflation on the rise and talk of a national recession, the governor pushed back against calls to dip into the state’s reserves as a way to make up the deficit, instead preserving an estimated $38 billion for the rainy day fund.
“In the face of continued global economic uncertainty, this budget increases our fiscal discipline by growing our budget reserves to a record $38 billion, while preserving historic investments in public education, health care, climate, and public safety,” Newsom said in a statement.
The framework for the budget was passed on June 15. Republicans see the proposed budget as unsustainable, stating that assumed revenues have led California to the deficit.
Pacific Research Institute’s Senior Fellow in Business & Economics, Wayne Winegarden, notes the lack of budgetary discipline by the legislature.
“The budget agreement is a disappointment,” he told The Center Square Tuesday. “It does not impose the necessary fiscal discipline and solidifies the huge increase in spending that has occurred over the past several years. Making this unaffordable spending worse, the budget relies too heavily on budget gimmicks, borrowing, and pushing costs into the future.”
It’s a sentiment previously echoed by Republican Sen. Scott Wilk.
“Our actual spending plan will be tinkered with until October, when we finally know exactly how much money is in the state’s coffers,” Wilk said. “When that time comes, we must spend smarter to ensure we use our limited resources in the most impactful way.”
Newsom remains optimistic.
“We’ve attached new accountability measures for transit and homelessness investments,” he said. “And we are accelerating our global leadership on climate by fast-tracking the clean energy projects that will create cleaner air for generations to come.”
Newsom remains focused on building his vision for California with an expansion of businesses that lead the way on new tax credits for the manufacturer of computer chips, and clean energy, creating hundreds of thousands of jobs for disadvantaged communities.
“I want to thank the Legislature for their hard work on a budget that prioritizes the needs of Californians while keeping the state on strong economic footing,” Newsom said.
The budget includes support for several senate and assembly bills that have passed the Legislature and continue to support core programs.
