by Sophia Bollag at sfchronicle.com
SACRAMENTO — Gov. Gavin Newsom on Friday unveiled his updated plan to close a projected $31.5 billion budget deficit, a larger shortfall than analysts projected at the start of the year.
Newsom’s updated 2023-24 budget plan reflects an anticipated $306.5 billion total budget, including a $224 billion general fund, the part of the budget where Newsom and lawmakers generally have the most control over spending. Despite the larger deficit, that’s an increase from January, when Newsom unveiled the first version of his budget plan, which totaled $297 billion and reflected a $22 billion projected shortfall.
The updated projections reflect what Newsom described as unprecedented uncertainty about how much money the state will actually bring in over the next year. Delayed tax deadlines because of storms that inundated the state, the impasse in Washington over the federal debt ceiling and the looming threat of a recession all add to the uncertainty.
“We’re going into a budget in a way we’ve never gone into a budget before,” Newsom said. “We need to prepare not just for the short term, but for the medium and the long term.”
Newsom and lawmakers rely on state analysts’ predictions about how California finances will look over the next year to craft their state budget plan. They’ll have to make decisions about how to structure the state budget by the July 1 start of the upcoming fiscal year, before they have a clear picture of tax receipts from 2022 because the tax filing deadline in most counties has been pushed back to Oct. 16.
Newsom doesn’t want to balance the budget by dipping into the state’s rainy-day fund. In fact, he’s proposing adding to California’s reserves because of the threat of a future recession. That’s part of the reason his overall budget proposal has grown since January despite the increasing deficit.