California Governor Gavin Newsom announced Friday that his state is already facing a more severe budget deficit than initially anticipated. In a press conference, Newsom said that the budget proposal for the upcoming year had ballooned from $297 billion in January to $306.5 billion, leaving a potential deficit of roughly $31.5 billion dollars.
Though Newsom proposed a series of cuts and offset spending in an effort to mitigate the state’s need to borrow, the budget proposal plans to add $7.4 billion in deferred spending for child care, transportation, and education. It also delays some $695 million in spending until later years.
The plan also includes $3.9 billion in “trigger reductions,” temporary cuts he can re–instate if California’s fiscal state improves later. The budget closes the remaining gaps with $4.9 billion in borrowing and new revenue, $7.5 billion from shifting funds around, and $450 million from the state’s safety net reserves, leaving $450 million remaining. Newsom plans to add to the reserves to hedge against a future recession.
At the same time, California’s Reparations Task Force proposed its plan to repay residents who were descended from slaves or victims of discrimination. The nine–member panel advanced the plan recommendations in Oakland, California, which includes calculated dollar figures based on categories ranging from mass incarceration to housing discrimination.
Some economists projected to The Associated Press that California could owe more than $800 billion in reparations, which more than doubles the state’s annual budget. Newsom himself lauded the principle of the committee, but did not endorse the proposed payouts.
The news of both the budget shortfall and the proposed reparations plan has left many Californians wondering how the state plans to make ends meet. However, Newsom and his administration remain adamant that they are doing their best to maintain “prudence” and “take care of the most vulnerable, most needy.” The state is hoping that the borrowing and shifting of funds, coupled with the “trigger reductions,” will be enough to bridge the gap left by the budget deficit.