SACRAMENTO, Calif — As California braces for a record-breaking $68 billion deficit, Governor Gavin Newson's Finance Department is ordering departments and agencies to pause all non-essential spending.
A letter sent out Tuesday included everything from travel to new equipment and office supplies.
There's been a lot of back and forth on who's to blame for the deficit. Republicans are blaming it on the Democrats, while a policy organization said it has to do with politicians spending more money than they're bringing in.
The big question now is whether the hold back on spending can really help.
"I think most Californians, who have common sense, are asking themselves how is it possible to go from a nearly $98 billion surplus to a $68 billion so-called deficit in less than 18 months," said Jon Coupal, president of the Howard Jarvis Taxpayers Association.
Coupal said he's not surprised California is in a deep deficit. The way he sees it, state lawmakers lack discipline when it comes to spending.
"The amount of revenue, the budget actually has doubled in nearly six years by a tune of $116 billion dollars in just the last six years. So while the revenue has been there, California's appetite for spending has exceeded that," said Coupal.
According to the spokesperson for the state's Department of Finance, there are two main reasons it got to this point.
"Number one, it's due to the fact that the stock market really took a tumble in calendar year 2022 and that cost a lot of high-end earners who pay the bulk of the state's income tax," said H.D. Palmer, spokesperson for the state's Department of Finance.
The second reason is victims of flooding during the winter storms were given an extension until October to file their taxes.
The way the Department of Finance plans to close the substantial budget gap is by asking departments and agencies to hold off on non-essential items.
"Basically, although you're authorized to spend money under the current budget, if it's not related to the core essential functions of state government, hold off. Don't do it. For example, if you were planning to refresh or buy new computers in your office or cellphones, if they're not essential for cyber security, don't do it," said Palmer.
Right now, the state has about $22 billion in the rainy day fund. But GOP Chairwoman Jessica Patterson says it’s not enough.
"We really need to look at fiscal restraint, and the next time that California's have a surplus maybe listen to Republicans who have said let's put more away for a rainy day for in times when we don't get as much in the revenue side of things," said Patterson.
The Department of Finance is asking departments to report back on a monthly basis. There isn't a firm amount on where it will end up, but they feel it will be significant.
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