The California Legislature has voted against many of Governor Gavin Newsom's proposed budget cuts in an effort to address a projected $45 billion deficit. Lawmakers have chosen to accelerate a temporary tax increase on certain businesses while maintaining funding for key social safety net programs.
The approved budget is not final, as negotiations between Newsom and legislative leaders are ongoing to address the budget shortfall before the new fiscal year begins on July 1. The Legislature was required to pass a balanced budget by Saturday to avoid forfeiting their salaries, a rule established by voters in 2010 to prevent budget impasses.
The vote does not signify a public rebuke of Newsom, but rather underscores the differing approaches between the governor and the liberal-leaning Legislature. Newsom's budget proposal included some contentious cuts, such as halting funding for in-home caretakers for certain disabled immigrants and eliminating a program aiding low-income families with housing.
To offset these cuts, lawmakers opted to expedite a tax increase proposed by Newsom, generating an additional $5 billion in revenue. They also identified significant budget reductions, including a $1 billion cut to the state's prison budget and canceling a $400 million loan to PG&E for the Diablo Canyon nuclear power plant.
While progress has been made in negotiations, unresolved issues remain, including the fate of a scheduled minimum wage increase for health care workers. Newsom seeks to delay the wage hike, which could cost the state hundreds of millions of dollars.
Republicans criticized the spending plan as unsustainable, particularly the tax increase on businesses. Democrats defended the tax proposal as a necessary measure during challenging budgetary times.
Lawmakers anticipate finalizing a budget deal by the end of next week, with ongoing discussions aimed at resolving remaining disagreements.
