California Governor Proposes Steep Budget Cuts, Including 10% Pay Cut for All State Workers




Forbes- California Gov. Gavin Newsom on Thursday proposed steep cuts to the state’s budget, including a 10% pay cut for all state workers, reflecting challenges California and other state governments are facing as they contend with depleted state budgets and uncertain federal aid.

KEY FACTS

  • Newsom proposed canceling $6.1 billion in program expansions and previously approved spending increases, including canceling a plan to give healthcare benefits to undocumented immigrants over 65.
  • The budget proposal includes an across the board 10% pay cut for all state employees—including Newsom and his staff—which would save $2.8 billion overall.
  • Additional cuts include $30 million for state parks starting in 2021, $700 million in promised state funding for homelessness services and a 10% cut to both the University of California and California State University systems.
  • To reduce the severity of proposed cuts, the proposal uses 50% of the money from the state’s rainy day fund, and it depends on future federal aid that hasn’t yet been approved by Congress and caps tax credits for some individuals and businesses.

 “COVID-19 has caused California and economies across the country to confront a steep and unprecedented economic crisis—facing massive job losses and revenue shortfalls,” Newsom said in a statement. “We are proposing a budget to fund our most essential priorities – public health, public safety and public education—and to support workers and small businesses as we restart our economy. But difficult decisions lie ahead.”

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