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Newsom says California budget deficit is a direct result of Covid-19

Newsom, along with governors in Washington, Oregon, Colorado and Nevada, have asked Congress to send more aid to state governments.

Posted: May 18, 2020 1:06 PM

(CNN) -- California Gov. Gavin Newsom on Sunday said the nearly $54 billion budget deficit the state is facing is a direct result of the impact from the coronavirus pandemic and not because of existing financial troubles.

Asked by Jake Tapper on CNN's "State of the Union" how much of the state's financial crisis is a result of pre-exisiting financial obligations, Newsom said, "None."

"None. That $54.3 billion is a direct result of Covid-19. Just a few months ago, I introduced my January budget, but with, again, a projected surplus. We paid off 100% of our debt we had inherited over seven or eight years ago. We were using $9.13 billion of the surplus last year to pay down long-term pension obligations," Newsom said.

The Democrat's comments come days after he announced a grim budget plan that would slash state funding for education and other programs to make up for a shortfall due to the pandemic. Newsom previously announced a $5.6 billion budget surplus, but the state is now contending with a $54.3 billion deficit that they must close before the next fiscal year starts on July 1.

Newsom, along with governors in Washington, Oregon, Colorado and Nevada, have asked Congress to send more aid to state governments.

Newsom told Tapper the aid given to states is "not charity" and again called for federal assistance.

"We have been managing our budget effectively, efficiently, paying down our long-term pension obligations. We had a bond rating that went up twice last year, the highest in decades," he said. "So we're not looking for charity. We're not looking for handouts. Social responsibility at a time when states, not just California, large and small, all across this country, cities and counties, large and small, all across this country, are facing unprecedented budgetary stress. It is incumbent upon the federal government to help support these states through this difficult time."

The Trump administration and Senate Republicans are currently resisting further federal economic spending.

The House of Representatives on Friday passed a sweeping bill to spend more than $3 trillion for Covid-19 relief. The legislation, which was not a product of bipartisan negotiations, would stand as the largest relief package in US history.

House Democratic leaders argued that the package, which allocates funding for state and local governments, coronavirus testing and a new round of direct payments to Americans, is urgently needed to address the crisis. Republicans however have made clear that it is dead on arrival in the GOP-controlled Senate.

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