California approves budget with $46.8 billion deficit

Governor Gavin Newsom signed the bill over the weekend California’s budget with an estimated deficit of $46.8 billion through $16 billion in spending cuts and temporary tax increases for some businesses.

The California Legislature approved the budget on June 26 after an agreement between Newsom and legislative leaders in which both sides made concessions and achieved certain victories.

For second consecutive Year, Both the governor and legislators were forced to cut back or delay some progressive policies which had been driven by record surpluses achieved during the COVID pandemic.

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“This is a responsible budget “that prepares for the future while investing in critical programs that benefit millions of Californians every day,” Newsom said in a news release.

“Thank you to the careful management of the budget over the past few years“We can meet this moment while protecting our progress on housing, homelessness, education, health care and other priorities that matter most to Californians,” he added.

In 2023, the deficit was about $32 billion.before rising even further this year, and California is even projected to run larger deficits in coming years.

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The signing of the budget took place just Two years after Newsom and Democratic lawmakers highlighted surpluses totaling more than $100 billionthe product of hundreds of thousands of dollars in federal pandemic aid and a progressive tax code that produced a windfall of income for the state’s wealthiest residents.

However, those income rates did not last.as inflation slowed the economy, contributing to rising unemployment and a slowdown in the tech industry that drove much of the state’s growth.

The Newsom administration miscalculated how much money California could have in 2023 after a seven-month delay in the tax filing deadline.

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Historically, California has been prone to large budget swings due to dependence on wealthier taxpayers.

However, those deficits have come at a bad time for Newsom, who He does not neglect to build a national image for a possible future presidential candidacy and as one of the main representatives of President Joe Biden’s campaign.

The budget includes an agreement under which Newsom and Democratic lawmakers will try to change the state constitution to allow California to put more money in reserve for future deficits.

Keep reading: California’s budget deficit grows by nearly $32 billion, Gov. Gavin Newsom says

Republican lawmakers said they were left out of the negotiationsThey criticized the corporate tax increase, which applies to companies with at least $1 million in revenue and will last for three years, which would mean more than $5 billion more for the state by 2025.

In addition, Republicans also criticized Democrats for some cuts to social safety net programs.

Keep reading:
· California Governor Gavin Newsom Announces $297 Billion Proposed Budget for Fiscal Year 2023-2024
· Undocumented people aged 55 and older could receive the CalFresh benefit, as it is included in the 2022-2023 state budget
· When will the budget that will fund the $600 stimulus check and other California aid be approved?