California lawmakers approved a budget that slashes spending and temporarily raises taxes on some businesses to close an estimated $46.8 billion budget deficit.
ADAM BEAMCalifornia lawmakers approved a budget on Wednesday that slashes spending and temporarily raises taxes on some businesses to close an estimated $46.8 billion budget deficit.
Those revenue spikes did not last as inflation slowed the state's economy, contributing to a rising unemployment rate and a slowdown in the tech industry that has driven much of the state's growth. The Newsom administration then badly miscalculated how much money the state would have last year after a seven-month delay in the tax filing deadline.
The budget includes an agreement that Newsom and lawmakers will try to change the state constitution in the coming years to allow California to put more money in reserve to prepare for future shortfalls. Many previous promises have been paused or delayed. Two years ago, lawmakers pledged to help pay child care expenses for an additional 200,000 families by 2026. This budget delays that promise to 2028, with the caveat it will only happen if there is money available for it.
And a promise made last year to increase the minimum wage for health care workers this summer has been delayed until January at the latest. Republicans said they were left out of budget negotiations. They criticized the tax increase on businesses, which applies to companies with at least $1 million in revenue and will last for three years, bringing in more than $5 billion in extra revenue for the state next year. And they criticized Democrats for some cuts to some social safety net programs.
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California Legislature approves budget that slashes spending to address $46.8 billion deficitCalifornia lawmakers have approved a budget that slashes spending and temporarily raises taxes on businesses. The budget closes an estimated $46.8 billion budget deficit. It's the second year in a row the nation's most populous state has had a multibillion-dollar shortfall. The budget includes $16 billion in cuts.
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