If it’s January it must be budget time in California, or so it would seem. Gov. Gavin Newsom held a press briefing to unveil his proposed budget, and it certainly looked official.
Mainstream media have variously reported that the governor’s budget proposal is “austere,” “fiscally responsible,” and even “conservative” as the state tries to close a projected $22.5 billion deficit. But there are things taxpayers should know before breaking out the champagne to celebrate the governor’s handling of what he has called a “modest shortfall.”
A spending problem, not a revenue problem.
The governor’s proposed $297 billion budget is only about 3.6% smaller than last year’s record-setting budget of $308 billion. The state has long spent beyond its means, but it has kicked it into overdrive in recent years. In just the last three years alone, spending has increased by almost $100 billion dollars despite warnings from economists, the Legislative Analyst’s Office, HJTA and many others that the state was spending beyond sustainable revenue levels.
This is not the real budget.
They may call this a budget, but it is just a wish list. It is a way for the governor to signal his priorities to the Legislature as budget negotiations begin, and legislators from the governor’s own party have already been critical of the cuts he is proposing.
We also do not know what the actual dollar amount will be yet. In November, the budget shortfall was estimated to be around $24 billion. The governor now says it is $22.5 billion. We will have a better idea of where the state stands financially when the governor does his “May Revise” of the budget.
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