The Legislative Analyst forecasted a $68 billion deficit for 2024-25 and the dismal reduction in revenue facing the state. Assembly Republicans urge the Governor to act now. They warned him that waiting will only result in further financial pain for Californians.
Below and attached is a copy of their letter:
January 8, 2024
The Honorable Gavin Newsom
Governor, State of California
1021 O Street, Suite 9000
Sacramento, CA 95814
Dear Governor Newsom:
Following the Legislative Analyst’s announcement of a $68 billion deficit, we asked you to call a special session to immediately address the state of California’s fiscal soundness, and the $30 billion annual ongoing deficits in future budget years. You have chosen to do nothing but deflect instead of addressing the gravity of this problem.
Now, we urge you to declare a fiscal emergency to enable your administration and the Legislature to proactively engage in solving the massive budget gap your administration created.
The budgets passed by you and the legislative Democrats in the last three years have added $17.3 billion of new ongoing costs, while knowing that we were facing uncertain budget projections.
Unanticipated surpluses have receded and excessively high revenues are a thing of the past while spending has only increased. We unfortunately appear to be entering a new, “normal” for our revenue stream.
Underlying General Fund spending must be reduced to align with that new normal revenue stream. The Legislature needs sufficient time to evaluate one-time and limited-term spending, as identified by the Legislative Analyst. This spending could be curtailed in the current and upcoming budget years while also limiting the ongoing spending growth that has occurred in the recent past.
We continue to urge you to call for a special session, and now also declare a fiscal emergency to ensure that all possible solutions are employed to restore order to our fiscal state. While dipping into available reserves may be necessary to address revenue shortfalls, they should only be used judiciously to maintain core government programs.
Preparing now will lessen the pain for Californians who depend on state services. Waiting will only cause more harm and uncertainty if money continues to unabatedly drain.
Sincerely,
Vince Fong
Vice Chair, Assembly Budget Committee
Assembly District 32
James Gallagher
Assembly Republican Leader
Assembly District 3
