California lawmakers vote to reduce deficit by $17 billion, but harder choices lie ahead

SACRAMENTO, Calif. (AP) — California lawmakers don’t know for sure how big their budget deficit is, but on Thursday they decided it’s big enough to go ahead and reduce spending by about $17 billion.

The vote represents a preemptive strike from Democratic Gov. Gavin Newsom, who is trying to get ahead of a stubborn shortfall that has been increasing every month and will likely extend into next year and beyond — when the second-term governor could be eyeing a campaign for the White House.

The true size of the deficit has been difficult to pin down. In January, Newsom insisted it was about $38 billion. But the nonpartisan Legislative Analyst’s Office said it was actually $58 billion because Newsom didn’t include some reductions in public education spending. Then in February — after state revenues continued to come in below expectations — the LAO revised its estimate to as much as $73 billion.

State budgets across the country have tightened as economic growth has slowed and states have exhausted the billions of dollars in aid from the federal government during the coronavirus pandemic. The problem is more pronounced in California, where the budget is easily the largest in the country — and in fact the state’s economy is bigger than most countries.

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