California Gov. Gavin Newsom (D) on Friday announced a $27.6 billion shortfall in his revised proposal for the 2024-25 state budget, while proposing a series of cuts to close the spending gap.
The $27.6 billion detailed in his proposal, plus $17.3 billion in proactive cuts recently agreed upon between the administration and the state Legislature, amount to a total of $44.9 billion total deficit.
The governor proposed a $288.1 billion top-line budget figure, down from Newsom’s initial January proposal for a $291.5 billion budget. Although the total $44.9 billion deficit is higher than the $37.9 figure projected in January, Newsom’s revision involves withdrawing $4.2 billion from the state’s reserves — down from the $13.1 billion he initially recommended.
Newsom’s revised proposal seeks to close the spending gap through a series of cuts, including $15.2 billion in spending reductions and $14.8 billion by pausing planned program expansion. It would also slash $3 billion to improve efficiencies and borrow $7.5 billion.