Governor Gavin Newsom has proposed solving a record budget deficit by tapping reserves, borrowing money from special funds, deferring spending and raising some targeted revenues.
But the major budget solution to an estimated $54.5 billion deficit depends on spending federal funds already allocated to California and receiving federal funds not yet approved by Congress. Without the new federal funding, the budget would automatically trigger $14 billion in new spending cuts, beginning July 1.
The updated budget proposal, called the May Revision, projects the worst of the economic impacts from the pandemic to be in the second quarter of 2020 and to persist for several years. A slow recovery is projected as restrictions on economic activity gradually begin to ease. Read More