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I’m CalMatters Capitol reporter Alexei Koseffsubbing for Lynn.
As a brand new legislative session will get underway in Sacramento subsequent week, officers are sending combined indicators concerning the state of the state funds and simply how bold California can afford to be within the coming 12 months.
A mere week in the past, the Legislature’s nonpartisan fiscal adviser launched its annual outlook, projecting a small deficit that would quickly develop into a lot bigger deficits and warning that the state has no capability for brand spanking new spending commitments. Legislative leaders endorsed that message, urging restraint and a deal with defending current providers.
However Gov. Gavin Newsom nonetheless has huge, costly concepts — particularly as California gears up for one more Trump administration wherein the state could play captain of the resistance.
He introduced on Monday that if President-elect Donald Trump follows by way of on plans to eradicate a federal tax credit score for electrical autos, Newsom will suggest reviving an expired state rebate program. The governor beforehand floated making a backup catastrophe aid fund in case Trump denies emergency assist to California and, unrelated to the president, doubling the state’s movie and tv manufacturing tax credit score.
That’s doubtlessly billions of {dollars} in extra spending — earlier than we even get Newsom’s full funds pitch in January.
Funding for the electrical autos rebate, at the least, would come from California’s cap-and-trade program for giant greenhouse fuel emitters, a special pot of cash than the final tax income stream that fiscal officers say is at present tapped out.
However any new applications, at a time when California is dealing with looming deficits, would possible should be offset by cuts elsewhere to maintain the state’s almost $300 billion funds balanced.
Whereas Newsom’s Division of Finance says he’s acquired a plan to maintain every thing in verify — which he should share publicly by Jan. 10 — his options might come into battle with the Legislature. Lawmakers, who should ship Newsom a funds by June 15, may have their very own priorities on which state applications to guard and, taking the governor’s lead, maybe their very own concepts for brand spanking new spending.
On condition that we’re months away from critical negotiations, not to mention a funds deal, key gamers are nonetheless retaining their playing cards near the vest.
Senate President Professional Tem Mike McGuirea Healdsburg Democrat, informed CalMatters in an interview Tuesday that his caucus “will review the multiple proposals that are being advanced” by Newsom, however he refused to say whether or not he’s even open to creating new applications or increasing current ones subsequent 12 months. As an alternative, he reiterated the cautious and considerably cryptic stance that he took final week.
- McGuire: “We need to be incredibly strategic on any new potential spending, and we need to err on the side of caution as we move forward into the budget negotiations.”
