California faces budget deficit, announces widespread cuts to state services

By Alexei Koseff (CALMATTERS) – California will make widespread cuts to state government operations, prisons, housing programs and health care workforce training in order to maintain its social safety net as it moves to close a multibillion-dollar budget deficit. The spending plan, announced this morning by Gov. Gavin Newsom, Senate President Pro Tem Mike McGuire and Assembly Speaker Robert Rivas, also relies on reserves and pauses some business tax credits to address the revenue gap estimated at $56 billion over the next two years. “This agreement sets the state on a path for long-term fiscal stability — addressing the current shortfall and strengthening budget resilience down the road,” Newsom said in a statement. “We’re making sure to preserve programs that serve millions of Californians, including key funding for education, health care, expanded behavioral health services, and combatting homelessness.” The Legislature passed a budget more than a week ago in order to meet a statutory deadline, but it did not represent a final deal with Newsom as they continued to negotiate over whether to repurpose billions of dollars earmarked to increase payments for health care providers who treat low-income patients and whether to further delay minimum wage increases for health care...