New Lawmakers
Politico reports that the members of the state Assembly and Senate helping Gavin Newsom have “have never even led state budget negotiations in good times, let alone addressed a shortfall of this magnitude.”
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The article points out that this inexperience “extends to the entire class of lawmakers in Sacramento, some of whom were still in short pants during the Great Recession.”
Time is Running Out
The budget for California’s state government has to be approved and ready to go by the middle of the summer.
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This realistically leaves only three months left to tackle this huge deficit budget that totals in the tens of billions. California has the largest state budget in the entire United States.
Deficit Dispute
There is some dispute over the actual projected budget deficit. Newsom’s office originally reported that the number was around $38 billion.
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However, CalMatters reported in February that Newsom is underestimating the extent of the budget deficit. The Legislative Analyst’s office projected the budget shortfall for 2024 to 2025 to be close to $73 billion.
Historic Number
The budget deficit has been seen as record-breaking by many. Gary Dietrich a political analyst for CBS said “”Seventy-three billion, historically big number. That is important to understand, that is not a small number, that is a big number.”
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Just a few years before, California was riding high on a multiple-billion-dollar surplus. CalMatters reported that in 2022, the state budget had a surplus of more than $97.5 billion.
What Happened?
The Legislative Analyst’s Office published a Fiscal Outlook report in December that examined how exactly the state has gotten here.
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Chief to blame was a shortfall of expected revenue. California granted filing extensions to many residents for their taxes in 2022. The report also blamed higher borrowing costs that have stalled the state’s economy. Less investment from residents means less tax revenue for California to collect.
No Stone Unturned
It will take more than cutting a few corners to right the ship again. It is likely that many of the cuts in places like environmental programs, homelessness, housing, and others could disappoint voters in California.
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“Everything is on the table. They listed all the major areas of the state budget,” Dietrich said.
New Experience
These newly appointed members of the state legislature have quite an arduous task ahead of them. With little to no experience, they have to right the ship on California’s ballooning budget crisis.
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Jesse Gabriel, one of the recent appointees to the Assembly Budget Committee, expressed their rookie status. “This is going to be a new experience for almost everybody, including me,” said Gabriel.
Who Has Experience?
Reportedly, there are only eight state lawmakers in California who served during the Great Recession in 2007-2009. These eight lawmakers also have no current positions of power in the legislature, meaning the effort to reform the budget is left to newer ones.
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Lawmakers will have to rely on political aides and become quick studies of budget negotiations in record time for the budget to be properly reduced by the deadline.
Resistance to Cuts
Some of the rookie lawmakers have never even had to vote on such cuts to the budget before, often running campaigns that promised to give their constituents extra things from the government to win their seats in the first place.
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These lawmakers will have to find a way to strike a balance between massive budget cuts and protecting key programs and promises that got them elected.
Tough Budgeting
California lawmakers are having to quickly learn the art of “tough budgeting.” Senate Pro Tem Mike McGuire has enlisted the help of one of the few Great Recession holdovers in the legislature, Scott Wiener.
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“We work hand in hand together. We’ve been in the trenches together, tackling some of the biggest issues facing the state and Legislature over these past many years,” McGuire said of Wiener.
Borrowing Versus Cuts
While cuts are being strongly considered, another option the state has is to borrow from its own state funds. California is currently sitting on cash that has already been earmarked for specific programs, which could be redirected to soften the deficit instead of slashing more programs.
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As lawmakers scramble to get budget negotiations done in time, Californians are just hoping this isn’t the start of another Great Recession.