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Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

California Legislature passes largest budget in history, agreement with Newsom still to come

The California Legislature has passed the largest budget in the state's history, but they have yet to reach a deal with Newsom.

SACRAMENTO, Calif. (CN) — Disagreements did not stop the California State Legislature from passing its version of the 2022-23 fiscal year budget Monday evening.

Each year the California Legislature has to pass a version of the budget by no later than June 15 or else members of the Legislature will not get paid. This addition to the California Constitution was approved by voters several years ago.

Even though the Legislature passed its version there are still differences between the budget it passed and the budget proposed by Governor Gavin Newsom; no matter which budget is finally approved, the finished product will be the largest budget in the history of California at nearly $300 billion.

The budget this year has one of the largest surpluses in the history of California at nearly $97.5 billion and half of that is required to go toward education under Proposition 98. A large majority of the surplus this year came from capital gains.

The Legislative Analyst’s Office, in a report issued in May when the revised budget was announced, is concerned that next fiscal year will not have the same amount from capital gains taxes and the possibility of an economic slowdown or recession impacting the economy and therefore tax receipts.

In a statement from Anthony York, Newsom’s senior advisor for communications, he said Newsom would like to see more immediate direct relief to help millions of families across California help confront the issue of raising gas prices, food prices and inflation.

One issue standing between the Legislature and Newsom is over how to deliver relief and whether to do it through a debit card issued to every California who has a vehicle registered through the Department of Motor Vehicles or go through the process of cutting the gasoline tax.

Members of the Assembly Budget Committee were hesitant to get behind the idea of the state working with a third-party vendor to issue debit cards, noting that it could take some time to roll out the program. Alex Lee, a Democrat from San Jose, noted that only relying on those who drive a vehicle ignore Californians who do not drive and are still being impacted by the increase in prices.

“Given the financial storm clouds on the horizon, a final budget must be fiscally responsible. The Governor remains opposed to massive ongoing spending, and wants a budget that pays down more of the state’s long-term debts and puts more money into state reserves. The legislative proposal is also silent on the Governor’s plan to shore up our state’s energy supply to ensure we can continue to keep the lights on as California wrestles with more extreme heat and weather. We look forward to working with the Legislature to craft a responsible budget that gets more Californians the immediate relief they need, meets our state’s energy needs and ensures long-term fiscal stability,” York said in a statement.

Some items in the budget such as wildfire prevention and others still need details of how the money will be spent and will most likely be decided during or after the summer recess in July.

Both parties are now in a crunch to meet the deadline of July 1, when the new fiscal year begins, to reach an agreement, as Newsom’s Office has not indicated that he will sign the budget the Legislature has passed.

Categories / Economy, Government

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