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One of the many tricks that California Governors and legislators use to document the budget deficit, thus avoiding real cost reductions or increasing taxes is to accept some level of savings from savings from savings savings Making government agencies and programs more efficientS
They will include arbitrary numbers in the budget of such suspected efficiency, then, along with other tricks, declare that the budget difference is closed and patted the back for the exploit.
The 2024-25 budget is an excellent example of such a political evaluation. AS Accepted last June It amounts to $ 297.9 billion, of which $ 211.5 billion is a total cost of funds. But the budget suggested that the state would receive $ 207.2 for revenue from common funds, so there was a difference in a bridge.
Governor Gavin News and legislators turned to a series of tricks and indirect loans To close the difference, including $ 2.9 billion in alleged efficiency savings in government agencies and state universities.
However, when Newsom revealed a 2025-26 budget The proposal in January the plan acknowledged that while universities reach their relatively tiny goals of savings of $ 200 million, other agencies will reduce cost by only $ 800 million, or less than one -third of its $ 2.7 billion goal.
The new budget also revealed that the total cost of funds from 2024-25 has been ballooning to approximately $ 232 billion-21 billion dollars more than the final version-although estimated revenue has also increased to $ 217 billion, the 2024-25 deficit will expand to $ 15 billion.
Last month, the budget analyzer of the legislature Gabe Petek announced that his staff had been Having difficulty getting accurate information by the administration on the decree of efficiency effectiveness.
“We have tried to receive information from some of the bigger departments to find out better what types of operational changes are applied to achieve identified savings,” Petek writes. “As we discuss more and later, we have received limited information so far.”
This endeavor in the weeds of the state budgeting generates two observations: one that chemikers is an integral part of the current process, and the second, that the state is facing chronic gaps between income and output, a condition called “structural deficit”.
This is a continuing discrepancy between what the state’s tax system can produce in revenue and what says that this law must be spent. The problem dates back to 2022, when Newsom announced that the state had an excess of $ 97.5 billion based on increasing revenue.
He and the legislators sharply increased the cost of this assumption, but that turned out to be an illusionwhich leads to the difference in income and overtaking, which will continue at least until the end of the Newsom Government – unless it and the legislators make real cost reductions or increase taxes.
Read more: Budget Whiplash in California: From a record surplus to a huge shortage in a year
Moreover, the destructive and deadly fires that have passed through Los Angeles will affect both the revenue and the expenses of the state book will more than likely to increase the structural deficit.
Newsom and legislators have already approved a $ 2.5 billion budget loans for fire -related costsWhich would increase the deficit even more unless he could convince President Donald Trump to send federal help. Even with federal rescue, however, Newsom is likely to leave his heir, whoever he may be, with a fiscal headache.
NEWSOM certainly hopes to skate without deep cost redundancies, nor increase in taxes, while continuing to cover chronic gaps with tricks, such as arbitrary savings of efficiency, direct and indirect loans and creative accounting.
It has even increased the cost in some categories, despite the slow revenue, the most spectacular -and the most indirect – Setting up state subsidies For the movie and video industry in southern California.
Sending more money to Hollywood while telling state universities to tighten their belts, which will potentially affect enrollment, it seems that the height of the wrong priorities seems to be.
