California Gov. Newsom's revised budget proposal includes billions in cuts

Posted at 1:59 PM, May 14, 2020
and last updated 2020-05-14 17:03:45-04

SACRAMENTO, Calif. (AP) -- Gov. Gavin Newsom Thursday proposed to cut $6.1 billion from a variety of programs as part of next year's state budget.

California faces a $54.3 billion budget shortfall, and the governor said the proposed $203.3 billion budget for 2020-21 -- a revision of his January proposal -- prioritizes public education, public health, public safety.

The budget proposal will also help Californians hit hardest by the COVID-19 pandemic.

“We are in a time that is simply unprecedented,” Newsom said.

The revision to the budget reflects a 22.3 percent decline in state revenue, compared to the January budget. Newsom’s January proposal included $222 billion in spending with a surplus of $6 billion.

Newsom’s proposed budget this time includes slashing funds for numerous programs, including spending on K-12 education and Medicaid.

Newsom's forecast estimates unemployment will climb to nearly 25 percent and tax revenues will drop by about a quarter.

“We entered into this moment in a much better place than we have previously entered into any recessionary moment,” Newsom said. “I say that soberly, not triumphantly. We’re going to be dealing with challenges we haven’t faced in some time.”

Newsom plans to tap the state's $16.2 billion rainy day reserves fund over three years. The governor said the state will take $7.8 billion from the fund in the first year, $5.4 billion in the second year, and $2.9 billion in the third year.

After a record budget surplus that allowed programs to grow, Newsom said it breaks his heart to have to make cuts. The governor also said many of the cuts could be eliminated if President Trump, "with a stroke of a pen," supports House Speaker Nancy Pelosi's Heroes Act.

“This is challenging, this will be trying, this will be a multi-year opportunity and effort. We are not arguing to solve a $54.3 billion shortfall overnight,” he said.

The budget also calls for 10 percent pay cuts for state employees, which Newsom said includes him and his staff.