‘They’re in a Panic.’: Newsom Critics React to Budget Crisis As Deadline Approaches

By: Alex Trent | Published: Jun 22, 2024

Recently, California Governor Gavin Newsom announced plans to make a number of cuts, including cutting millions from the state’s law enforcement budget ahead of the yearly budget deadline.

Critics of Newsom have criticized the proposal as desperate and a reversal of what a Newsom spokesperson originally told Fox News that there were “no cuts to law enforcement.”

Newsom Budget

Recently in May, Newsom unveiled a revised budget proposal that promised a “balanced budget over two years.”

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Governor of California Gavin Newsom smiles in a photo with a blurry background.

Source: Bureau of Reclamation/Wikimedia

“The Governor is solving two years of budget problems in a single budget, tightening the state’s belt to get the budget back to normal after the tumultuous years of the COVID-19 pandemic,” said a governor’s office statement in May.

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Uncertain Stock Market

One of the other issues Governor Newsom is having with this year’s budget is the uncertain stock market and delays to the federal tax deadline.

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Due to this, $38 billion in reserves have had to be set aside to help with any shortfalls, which only contributes further to California’s budget deficit problems.

California Is in a Budget Deficit

California’s budget deficit is $45 billion. To reduce this deficit, various services throughout the Golden State are being cut.

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Recent budget proposal cuts point towards making cuts on issues of public safety, but still has plans to commit to climate change within the state budget, which is something many aren’t happy about.

California Previously Had a Budget Surplus

This budget deficit is a relatively new issue for California, which has had a budget surplus of around $98 billion in previous years.

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In 2022, the Golden State had a $300 billion budget, with the surplus being on top of that. This surplus was expected to be used to future proof California, but clearly this plan didn’t work.

New Budget Proposal Is $7 Billion Short

Wanting to try and close this budget deficit, Newsom has been working on a plan for the 2024-25 fiscal year. However, these new proposals are $7 billion short of what he needs.

A person with three small piles of coins in front of them.

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To try and close this gap, Newsom is planning on using $4.2 billion of California’s reserves, as well as borrowing money. While this might seem like a good idea for now, it could cause more trouble in the long-term.

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Cuts to Police

According to Fox News, a spokesperson told them initially that “no cuts to law enforcement” would be part of the new budget.

The illuminated red and blue lights of a police car's roof-mounted light bar glowing intensely against a dark nighttime backdrop

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“The budget proposes numerous ways to make government more efficient and reduce costs for taxpayers, including cuts on inmate spending. Since Governor Newsom took office in 2019, the state has made record investments in law enforcement, including $1.1 billion to tackle crime, support police, and hold criminals accountable,” the spokesperson said at the time.

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Not the Full Story

While the revised budget was initially characterized this way, an official from California’s Department of Fiance told Fox News that there would be an overall 1.6% reduction in the state’s Department of Justice’s budget.

The California State Capitol building seen with people in front of it in the daytime.

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These cuts included a $97 million cut to trial courts, $10 million to the Division of Law Enforcement, and an $80 million cut to the Department of Corrections and Rehabilitation.

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In a Panic

Critics of Newsom and California seized on the dysfunction they saw on display with the budget crisis in the state.

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“What’s happening in California is just the greatest disrespect of taxpayer’s resources in the history of America,” said Florida’s chief financial officer, Jimmy T. Patronis. “They’re in a panic. They’re in a free fall. They’re looking for money to make up this enormous budget deficit they’ve got right now.”

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Why the Budget Crisis?

The California Legislative Analyst’s Office (LAO) in December estimated the state would have a multi-billion dollar deficit going into the 2024-2025 year.

A calculator lying on top of a pile of money next to a white notepad

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The governor’s own estimates at the time were lower, but still in the tens of billions. The LAO cited declining tax revenues as the primary factor for the budget shortfall.

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Plans Not Clear Close to the Deadline

The deadline for California’s budget for the 2024-25 fiscal year is June 15. With them being just a few days away from this deadline, it still isn’t clear what Newsom is planning to do.

An alarm clock next to a calendar.

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Despite various proposals for solving the budget deficit and shortfalls, there is currently no clear plan for where this money will go or which services will lose money.

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Saving for a Rainy Day

Newsom’s previous plans to use up some of California’s reserves to try and solve the budget deficit seem to have been put on hold, with the Golden State hoping it can now keep these reserves in case of a rainy day.

Coins in a glass jar with a green plant growing out of it.

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However, core programs are still in danger of having their funds slashed or taken away entirely, with many hoping that the poorest and most vulnerable in society will still be looked after.

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Those Struggling Are Being Punished

While the richest in society aren’t likely to be as affected by these budget cuts, it is the poorest and those struggling the most who will be.

A homeless person sitting on the side of the street.

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Many have shared their disappointment that Newsom hasn’t looked at solving the deficit from additional revenue and is instead bringing cuts to supportive services, including cuts to housing and homelessness, during an ongoing housing crisis in the Golden State.

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What is the Reason For Lower Tax Revenues?

Tax revenues are essential to funding the gov’t and many have proposed theories on why the tax revenues have come in lower.

A Federal Reserve Bank in San Francisco.

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According to the California Budget and Policy Center, one major reason was Federal Reserve interest rate hikes in 2022 that inhibited the economy and made tax revenues volatile. There was also a delay in tax collection that held up government funding.

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Alternate Theory

Patronis asserted that part of the blame for California’s budget deficit was that many businesses were fleeing due to concerns about crime. He was adamant that any cuts to public safety would result in the problem only getting worse.

Close-up of yellow 'CRIME SCENE DO NOT CROSS' tape, stretched across a blurred natural background

Source: Wikimedia Commons

“Ultimately, this vicious cycle where you’ve got a weaker prison system” will cause “weaker incarceration, which has been kind of the narrative that’s been coming out of California now,” Patronis said. “San Francisco has been kind of like the poster child for businesses fleeing a once-prosperous city.”

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Newsom Responsible

The Florida financial officer expressed gratitude at the California exodus, blaming the governor for hurting Californians and helping his own state. Patronis said that the recent California exodus of businesses has been fueling Florida’s own economy, pointing to recent record surpluses for the sunshine state.

Governor Gavin Newsom, in a dark suit, is captured from behind, gesturing while giving a speech at a podium

Source: Gage Skidmore/Wikimedia Commons

“The one that you have to hold responsible is Gavin Newsom,” said Patronis. “When you create a safe environment, people want to relocate their businesses.”

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Newsom Says He Has To Be Held Accountable

Knowing that he is responsible for California’s budget, as he is the Governor of the Golden State, Newsom has said that he is responsible for the budget and needs to be held accountable for what happens.

Governor Gavin Newsom standing behind a lecturn with the American flag behind him.

Source: Office of the Governor of California/Wikimedia Commons

In the same speech, he also made it clear that he has to balance the budget, but it is likely that some people and services will be left feeling disappointed.

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Newsom Is Breaking Policy Advancements

Within his policies when running for Governor of California, Newsom had promised several things, including free kindergarten for all 4-year-olds and free health insurance for all low-income adults.

Governor Gavin Newsom standing behind a lectern.

Office of the Governor of California/Wikimedia Commons

However, these promises are now in jeopardy as the budget deficit requires cuts in multiple areas, and Newsom has suggested that he is willing to take money away from these areas to help solve it.

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Newsom’s Presidential Hopes

With the US Presidental Election coming up in November 2024, Newsom is currently a top surrogate for President Joe Biden’s reelection campaign, so this budget deficit issue could cause problems with that.

An image of the White House with the American flag flying at the top of it.

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Newsom is also believed to have presidential ambitions. If this is true, the issues he’s been having with California’s budget deficit could form a shadow over these ambitions.

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From Both Sides

After the release of the revised budget, many interested parties took issue with the cuts. The California Teacher’s Association unleashed a high-profile ad attack on Newsom, a long-time ally, over his plans to reduce the funding for public schools.

A male teacher standing in front of a classroom with middle school students

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The pressure on Newsom forced a new deal to be reached that would add billions to California’s school districts in future funding.

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Environmental Concerns

Some environmental advocates saw many of the things saved by Newsom in the budget allocation as wasteful, pushing for him to prioritize clean energy over fossil fuels.

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“Despite a steep #CABudget deficit and the climate crisis, CA is still wasting money on fossil fuels. Instead of spending billions on oil and gas subsidies and unnecessary backup fossil fuel generators, we should prioritize #CleanEnergy investments,” wrote Steven King, a clean energy advocate for Environment California on X.

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A Downsized Government

One of the new budget proposals is to eliminate 10,000 unfilled government jobs to improve government efficiency and non-essential spending.

The inside of the US senate, with seats positioned in a half circle.

United States Senate/Wikimedia Commons

The hope is that this will be done without raising any taxes and to prevent this from happening. It also means that there will be fewer redundancies in government.

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Protests In California Cities

Advocates for care programs have been taking to the streets in major California cities to fight against proposed budget cuts in the past few days: cuts they see as cruel to the poorest and most disadvantaged residents.

Buses and cars driving down streets in downtown Los Angeles beneath tall buildings.

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“We’re in LA and San Francisco today advocating for a rollback of proposed budget cuts to essential care programs for aging and disabled people in California,” said care advocacy group Caring Across Generations on X.

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Budget Gaps in the Future

The 2024-25 fiscal year is unlikely to be the only year with budget gaps and deficits, as it has already been predicted that the 2025-26 fiscal year will have a $28.4 billion gap.

A calculator on top of a piece of paper and a pen with a green plant.

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This shows the dangers of what society’s most struggling people are set to endure over the next few years and suggests that Newsom and others in government should be trying their hardest to get the budgets under control to help protect the people they govern.

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