(RightWing.org) – California’s ultra-liberal state government has been digging itself into a financial hole for years, and now it’s hit bedrock. Faced with a massive budget deficit, far-left Governor Gavin Newsom (D) has ordered brutal spending cuts across every state agency. And, because no layoffs are allowed, the cuts will all come at the price of even worse services for the state’s residents.
On July 10, California’s finance director Joe Stephenshaw admitted the state is planning to spend over half its cash reserves over the next two fiscal years to plug holes in its budget. That money will be taken from reserve funds held for the school system and other vital services, and it still isn’t enough.
Newsom’s instincts would usually be to raise taxes and fill in the gaps that way, but it seems even California has realized that taxation has an upper limit. The new plan is to avoid charges to personal income tax, although businesses will be raided again. Instead, Newsom plans to cut spending.
The governor has now ordered all state agencies to slash their budgets by 8%, which will save an estimated $3 billion. There’s a catch, though. The plan doesn’t call for any job losses, meaning state employees are secure. As wages make up a large share of spending this means the cuts will disproportionately hit services.
Of course, some services are exempt from the cuts. Health care for illegal immigrants, which costs up to $6.6 billion a year, won’t be touched. On the other hand programs for the homeless will be reduced by $1 billion over two years. Some of the biggest cuts will be in green projects, which could lose up to $20 billion in funding.
However, many residents are already worried that education and other services will be trimmed back too — and, of course, higher taxes on businesses usually end up causing higher prices, which means California’s unlucky citizens are going to end up poorer even if Newsom does hold off on income tax rises.
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