Gov. Newsom says state’s budget deficit has grown to nearly $32 billion

Today in California's budget deficit, the governor now projecting the shortfall at $31.5 billion thanks to inflation and a decision to let most people delay filing their taxes until October. KTVU's Tom Vacar here with the update from the governor and his spending priorities. Tom. Now I want to show you some numbers, not just because they're numbers, because they're numbers you're paying for. The state deficit projected in January at just over $22 billion has now by $9.3 billion more, a 41% increase in Fridays announced $306 billion revised budget.

So we have a $31.5 billion challenge which is well within the margin of expectation and well within our capacity to address. Through a mixture of internal borrowing and revenue shifting, the budget will be less than 1% lower than the last one, but it will be seriously impacted by lower overall tax revenues, delayed tax revenues and inflation. We are in a position with this may revise building off of the January budget announcement despite some additional shortfalls to foundationally be in a position where we're preserving and enhancing and protecting programs that we all hold dear. Per pupil school funding trimmed down from the January proposal will still be the highest ever. Overall education funding, including higher education, is also higher. Homelessness, we're not backing away at all.

Fully funding, full commitment to move forward and that $15.3 billion address the issue of cleaning up these dam encampments. That's why overhauling housing is yet another top priority as is bond funded mental health funds and a $48 billion commitment to climate issues. Due to the overwhelming snowpack, the governor has sharply increased flood protection to almost a half billion dollars. A major increase in fentanyl enforcement treatment and intervention is in the budget. Now to erase that huge deficit, a combination of funding delays, program reductions, fund shifting, potential triggered cuts, depending on changing circumstances and borrowing or new revenue enhancements will be implemented. Why did all this happen? California's so-called progressive tax code gets most of its money from super wealthy taxpayers, the 1% who actually currently fund about half the state's budget.

Those taxpayers' rough rides in the stock market and other investments slashed their capital gains taxes. We believe we could do better and do more to be more efficient organization and we take that seriously. Republican minority leader James Gallagher slammed the governor's proposal saying in a statement, he cuts drought programs. That's dangerous. His physical gimmicks are short-sighted and his words about good in government and efficiency are yet another empty promise. Californians deserve better. Now by law, the budget, whatever it turns out to be, must be enacted and signed into law by June the 15th.

So, time to bargain. Tom Vacar, KTVU, Fox 2. Alright, Tom, thank you.

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