SACRAMENTO (AP) – Gov. Gavin Newsom declared a budget emergency Thursday that will allow California to take nearly $8 billion from a state reserve account to help plug a large budget deficit brought on by the coronavirus.
The state Senate is set to vote on the budget later Thursday, followed by the Assembly the next day. It will take effect July 1.
The budget surplus California enjoyed when the year began was quickly wiped out by the coronavirus pandemic, as the state delayed tax collections, businesses suffered and spending soared to battle the virus. Now, the state faces a predicted $54.3 billion deficit.
The proposed budget would take $7.8 billion from the state’s “rainy day” fund, about half of what’s in it, to help plug the whole. Newsom needed to declare a budget emergency to legally tap it.
The rest of the shortfall will be plugged through a combination of pay cuts to state workers and delayed payments to public schools, internal borrowing, spending cuts and temporary tax increases on businesses. Newsom wants more money from the federal government to avoid some of those measures.
He said in an emergency proclamation that the money is necessary to help pay for coronavirus related expenses such as purchasing personal protective equipment, medical supplies and services for vulnerable Californians.
Copyright 2020 The Associated Press.