Newsom releases budget plan to close $2.9 billion shortfall

"Gov. Gavin Newsom on Friday released his budget proposal to close a projected $2.9 billion shortfall significantly less than the $18 billion originally estimated that does not include any large cuts or major new spending proposals, or a specific plan to help the potentially millions of Californians who could lose their medical insurance or see premiums rise as a result of federal policy changes."

"The plan aims to fill the budget gap by proposing $1.55 billion in cuts to state operations and $1.2 billion in savings over two years by eliminating approximately 6,000 long-vacant positions. At the same time, it proposes a $1 billion expansion of community education programs and $195 million in new public safety investments, the governor's office said. The budget estimates the state will incur $1.4 billion in mainly administrative and other costs as a result of federal changes to Medicaid and food assistance programs, officials said."

"This budget reflects both confidence and caution, Newsom, who did not attend a news conference announcing the spending plan after his State of the State speech Thursday, said in a statement. Newsom's budget plan is only an initial proposal and will evolve as the financial forecasts are updated and state lawmakers, who must work with the governor to finalize the budget by mid-June, negotiate changes."

A budget proposal closes a projected $2.9 billion shortfall, far less than an earlier $18 billion estimate. The proposal avoids large cuts or major new spending and does not provide a specific plan for potentially millions who could lose medical insurance or face higher premiums from federal policy changes. The proposal seeks $1.55 billion in cuts to state operations and $1.2 billion in savings by eliminating about 6,000 long-vacant positions, while adding $1 billion for community education and $195 million for public safety. The budget estimates $1.4 billion in costs from federal Medicaid and food assistance changes and includes a $200 million electric vehicle rebate program.

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