California Gov. Gavin Newsom speaks in Sacramento, Calif., Jan. 10, 2023. (AP Photo/José Luis Villegas, File)
The agreement came after lawmakers passed legislation to increase the state’s tax on managed care health plans, also known as the managed care organization tax, which is estimated to generate $3.8 billion next fiscal year. The plan doesn’t touch the governor’s major spending commitments, including free health insurance for all low-income adults regardless of their immigration status.
"We are able to meet this challenge thanks to our responsible fiscal stewardship over the past years, including record budget reserves of close to $38 billion," Newsom said in a statement. "There is still work to do as we finalize the budget and I look forward to the work ahead together to continue building the California of the future."
Lawmakers are expected to vote on the new budget plan next week, which would pave the way for more budget negotiations before the June deadline.
"We are all committed to delivering an on-time balanced budget and this early action agreement is a critical first step to shrink the state’s shortfall," Senate President pro Tempore Mike McGuire said in a statement.
Assembly Speaker Robert Rivas called the agreement "the right way" to address the budget deficit. But Republican lawmakers slammed the plan Thursday and said they were shut out of the conversation.
"Our caucus has absolutely nothing to do with it," Republican Sen. Roger Niello said Thursday. "We learn all of these things later on, at about the same time as our 8 million constituents."
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Unlike the federal government, California law says the state must pass a balanced budget — meaning it can’t spend more money than it has. Newsom will present his revised budget proposal in May, and lawmakers have until June 15 to pass the budget.
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https://www.foxnews.com/politics/california-dems-reach-17-3b-deficit-reduction-agreement