Newsom’s proposed spending plan is just shy of $350 billion. According to the Governor, California faced an estimated 2.9 billion dollar shortfall back in January. But now he says the state doesn’t have a deficit.
State revenues are up 16 and a half billion more than originally projected, thanks to a booming stock market and growth in the AI industry.
This proposal includes record spending for TK-12 education. It also has funding for Affordable Care Act subsidies that Congress and the Trump administration eliminated through their big spending plan.
"No big new ongoing investments," says Newsom. "We can’t afford to do that right now. We need to tighten that belt and we need to focus, and I’ll get to efficiencies, and outcomes."
To shore up spending, Newsom proposes increasing healthcare premiums for immigrants without legal status. He also wants to limit corporate tax credits.
Still, Republicans criticize Newsom for what they say is overspending. Senator Roger Niello points out the state’s still likely to see deficits in the future.
"I do not think that he is leaving with a balanced budget," says Niello. "Because by definition it is completely out of whack after these first two years."
Now the legislature will weigh in during a final month of negotiations. Their budget deadline is June 15th.