Newsom pivots to deficit control

By Alexei Koseff CalMatters

California’s estimated budget deficit has grown by $9 billion since January, Gov. Gavin Newsom announced last week, though the governor downplayed the severity of its potential impact on critical government services and programs.

During a press conference at the California Natural Resources Agency in downtown Sacramento, Newsom unveiled a revised spending plan that will rely on some additional fiscal maneuvers — including shifting funding sources and internal borrowing — to address a projected $31.5 billion gap in the 2023-24 state budget.

“We have a $31.5 billion challenge, which is well within the margin of expectation and well within our capacity to address,” Newsom said.

Despite the growing shortfall, California’s overall budget is now expected to be $306 billion, including special funds, less than a 1% decline from a record $308 billion in the cur- rent fiscal year.

Newsom proposes to close the deficit by shifting an additional $3.3 billion in existing commitments out of the general fund, including paying for $1.1 billion in climate spending and $1.1 billion in college student housing projects with bonds,

See DEFICIT, Page A6