BREAKING NEWS CAL FIRE determines cause of 2 Shasta County fires to be arson Full Story
STREAMING NOW: Watch Now

California governor, lawmakers agree how to close deficit

California will make up its estimated $54.3 billion budget deficit in part by delaying payments to public schools and imposing pay cuts on state workers, according to an agreement announced Monday by Gov. Gavin Newsom and legislative leaders.

Posted: Jun 23, 2020 12:18 PM

SACRAMENTO, Calif. (AP) — California will make up its estimated $54.3 billion budget deficit in part by delaying payments to public schools and imposing pay cuts on state workers, according to an agreement announced Monday by Gov. Gavin Newsom and legislative leaders.

The agreement avoids billions of dollars in permanent cuts to public schools and health care programs, including proposals from Newsom that would have made fewer low-income older adults eligible for government funded health insurance and would have eliminated programs aimed at keeping people out of nursing homes where the coronavirus has spread with deadly consequences.

Instead the agreement, which still requires legislative approval, would make up the deficit in part by imposing $2.8 billion in pay cuts to state workers and delaying roughly $12 billion in payments to public schools to future years. The rest would come from borrowing from some restricted funds that must be paid back, spending cuts to other programs and temporary tax increases on businesses that would bring in $4.4 billion in new revenue.

Some of those cuts and delayed payments would be eliminated if the federal government sends the state more aid by October.

“We’re not solving for everything in one calendar month. We have a lot of work to do over the next few years,” Newsom said. “We cannot impress upon the federal government more (the) important work they have to do to help support municipalities large and small, states large and small, to help support us through this unprecedented period of time.”

In January, California was preparing for a multi-billion budget surplus as it enjoyed record low unemployment. But that changed in March, when Newsom issued a stay-at-home order to slow the spread of the coronavirus. The order forced many businesses to close and millions of people lost their jobs, sending state revenues plummeting.

Details of the budget agreement were not available in writing on Monday, and Newsom declined to discuss specifics during a news conference. But components of the agreement were confirmed by Assembly Budget chair Phil Ting, a Democrat from San Francisco, plus multiple people who work in the Legislature and the governor’s office, all of whom spoke on condition of anonymity because they were not authorized to discuss the agreement publicly.

“Now was not the right time to cut if we could avoid it,” Ting said. “It’s not a budget you can be pleased (with), but I think it was a budget that protects the right things.”

Delaying about $12 billion in payments to public schools means districts can go ahead and spend the money — either by borrowing or pulling from their reserves — and the state will pay them back later. Doing it that way avoids painful cuts now, but increases the deficit in the next year.

“Paying this year’s bills next year is going to make balancing next year’s budget even more problematic,” said Republican Assemblyman Jay Obernolte, vice chair of the Assembly Budget Committee. “It’s always easier to pretend that the situation will improve in the future than it is to make the difficult decisions in reducing spending today.”

The agreement also gives about $4.4 billion in federal coronavirus relief money to public schools to help keep some students from falling too far behind as they have been home since March because of the coronavirus. Schools would also get $1.1 billion in federal money to help with reopening in the fall.

The proposal does not include a cost-of-living adjustment for schools, essentially ensuring they get roughly the same amount of state funding they received last year. Normally, this means districts could lay off teachers and other employees to balance their budgets. But the proposal includes language preventing districts from doing that.

The budget has no major cuts to health care programs, protecting optional benefits like dental and vision for low-income people who receive government-funded health insurance. It also ensures that, for the first time, immigrants with at least one child 6 or under who pay their taxes with a taxpayer identification number are eligible for a credit that would give them more cash in their state tax refunds.

State workers, however, will see about $2.8 billion in cuts. The agreement empowers Newsom to suspend scheduled pay raises and impose up to two furlough days per month for any public union that does not have a collectively bargained agreement in place by July 1.

The state’s two largest public employee unions have already reached agreements with Newsom. That includes SEIU 1000, which represents slightly less than half of unionized state employees. The union agreed to pay cuts of just over 9%, but those are offset by temporarily suspending employee payments into a retirement health care fund.

“These are painful times. Nobody anticipated a pandemic like we’re all facing,” said Yvonne Walker, the union president.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 914888

Reported Deaths: 17460
CountyConfirmedDeaths
Los Angeles3020777027
Riverside669931303
San Bernardino633671073
Orange589801454
San Diego55210877
Kern33928416
Fresno30969439
Sacramento25601491
Santa Clara24425392
Alameda23471462
San Joaquin21729489
Contra Costa18763242
Stanislaus17714398
Tulare17590288
Ventura14330165
Imperial12967336
San Francisco12189140
Monterey1141990
San Mateo11198159
Santa Barbara9827122
Merced9531155
Sonoma9494136
Kings826483
Solano744576
Marin7096129
Madera503774
Placer420757
San Luis Obispo417432
Yolo321959
Butte309552
Santa Cruz280825
Napa196616
Shasta195431
Sutter186512
San Benito144215
El Dorado13514
Yuba132310
Mendocino113621
Tehama8928
Lassen7661
Lake69816
Glenn6713
Nevada6238
Humboldt56810
Colusa5516
Calaveras34218
Amador33116
Tuolumne2754
Inyo23115
Siskiyou2050
Del Norte1801
Mono1802
Mariposa792
Plumas700
Modoc360
Trinity270
Sierra60
Alpine30
Unassigned00
Chico
Clear
54° wxIcon
Hi: 77° Lo: 44°
Feels Like: 54°
Oroville
Clear
50° wxIcon
Hi: 78° Lo: 46°
Feels Like: 50°
Paradise
Clear
54° wxIcon
Hi: 72° Lo: 50°
Feels Like: 54°
Chester
Clear
18° wxIcon
Hi: 73° Lo: 37°
Feels Like: 18°
Red Bluff
Clear
44° wxIcon
Hi: 82° Lo: 46°
Feels Like: 42°
Willows
Clear
54° wxIcon
Hi: 79° Lo: 43°
Feels Like: 54°
Winds have calmed down but we remain dry. Temperatures will be in the upper-70s to low-80s for the rest of the week. This quiet weather is good for fire danger but unfortunate since no rain is in the forecast.
KHSL Severe
KHSL Radar
KHSL Temperatures

Community Events