"Gov. Newsom highlighted the impact of President Trump's tariffs, attributing a $12 billion increase in California's deficit to economic instability and unforeseen tax revenue declines."
"The governor's revised budget shows California facing an estimated $12 billion shortfall due to slowing tax receipts linked to Trump's trade policies and rising Medi-Cal costs."
"With reduced general fund expenditures, Newsom aims for budget resilience by proposing cuts in health program spending while maintaining overall spending stability at $322 billion."
"Newsom's administration must now make tough decisions to balance the budget sustainably, focusing on ongoing expenditure cuts and prudent reserve allocations."
Governor Gavin Newsom's revised budget for 2025-26 increases California's projected deficit by $12 billion, mainly due to economic impacts from President Trump's tariffs. Initially, the budget had an $11 billion gap which Newsom filled with various fiscal maneuvers. However, downward revisions of revenue forecasts prompted by trade policies have compounded financial stress, prompting necessary cuts in health program Medi-Cal. Newsom's budget outlines maintaining overall spending while targeting reductions in specific areas to stabilize the economy and ensure operational resilience for critical programs.
Read at www.mercurynews.com
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