Assemblyman Jesse Gabriel, chair of the Assembly Budget committee, smiles as a measure to reduce the state deficit is approved the Assembly at the Capitol in Sacramento, Calif., Thursday, April 11, 2024. Both houses approved the bill that takes a number of steps to reduce the state budget deficit by about $17 billion. Gov. Gavin Newsom has said the deficit is about $38 billion. (AP Photo/Rich Pedroncelli)
There were no headline-grabbing cuts in the reductions lawmakers approved on Thursday. Despite California's recent budget woes, the Democrats in charge have refused to raise income taxes or impose steep cuts to the most expensive programs, including health care and public education.
Instead, most of the savings comes from either cancelling or delaying spending that was approved in previous years but hasn’t yet been spent. It also relies on a number of accounting tricks to make the shortfall appear smaller, including shifting paychecks for state workers by one day from June 30 to July 1 so the state can count $1.6 billion in salaries for the next fiscal year.
By doing this, Democrats are betting California's budget problems are only temporary. The state is known for wild swings in revenue, especially given its overreliance on wealthy taxpayers who make most of their money from the stock market.
"We're trying to make thoughtful choices here," said Jesse Gabriel, a Democrat and chair of the Assembly Budget Committee. "At the same time, from my perspective one of the worst outcomes here would be to make a cut to a critical program that serves our most vulnerable folks and to later realize that you didn't need to make that cut."
Republicans have long complained about Democrats' approach to the budget deficits, arguing lawmakers should make structural changes to the state's spending to better align with the reality of the state's revenues. On Thursday, Republican Assemblymember Vince Fong declared it "only pushes this crisis into the future."
Still, Democrats have been saying for months they will likely be forced to make "tough decisions" on the budget later this year. The LAO has projected a deficit of $30 billion next year, which would be the third consecutive year of a multibillion-dollar shortfall.
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"We're not going to solve this problem anymore by just stopping one-time spending," Democratic Assemblymember Cottie Petrie-Norris said.
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https://www.foxnews.com/politics/california-lawmakers-vote-17b-deficit-reduction-plan