California used to be one of the states that set the trends for the rest of the nation but now it is the opposite. In 2022, state Governor Gavin Newsom declared the record $100 billion budget surplus in the history of the state of California in the United States.
For these two years, the state is in the red, and a deficit exceeds $50 billion. This sudden change poses a challenge to California’s progressive policy objectives and fiscal plan.
Fiscal Emergency
The entire state has declared a fiscal emergency by Governor Newsom because of a severe deficit in the budget. Adding to this challenge, this action leads to significant reductions in the budget and releasing money from the rainy-day fund. This further complicates Newsom’s efforts to implement his policy initiatives.
Concern over the impact of the imbalance of California’s fiscal budget is high. This is because the governor has only a 46% approval rating according to recent polls.
Budget in Shambles
Another issue that negatively affected Newsom was his first budget, which he proposed in 2019. It has been criticized due to its opacity and unclear financial policies.
The budget also contained several unnecessary expenditures such as the $75 million that was allocated for a high-speed rail that has been facing several challenges about its implementation time and cost.
Housing Issue
The issue of housing affordability in California remains a significant challenge up to this date and it gets worse under the leadership of Newsom.
Unfortunately, homelessness remains a significant problem. The most recent data indicate that well over 150,000 people are still experiencing homelessness, living on the streets or in homeless shelters. Today, it is nearly impossible for a Californian to afford a house with the latest data showing that the median home price is now over $650,000.
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Budget for Specials
Opponents have said that Newsom is aligned with the elites and has been representing their interests ahead of the average Californian citizen.
His previous budget proposals have always entailed supporting big businesses. Also, the super-rich campaign funders at the expense of the struggling working-class populace.
Agreement on Budget
Governor Newsom and the Democratic leaders of California have worked out a roughly $300 billion budget agreement in response to the issue.
“By addressing the current shortfall and bolstering budget resilience in the future. This agreement puts the state on a path for long-term fiscal stability,” Newsom said.
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Failure on Education
Low graduation rates and high dropout rates have remained disturbing features in the education system in California for a long time.
Despite taking office in January 2019, Newsom failed to tackle these problems. Also, thousands of students remain unserved from their education.
Opioid Epidemic Spreads Like Wildfire
California is one of the states that has been adversely affected by the opioid crisis, and overdose rates spiked in 2020.
This issue has also not been well addressed by Newsom’s administration which hasn’t adequately funded treatment programs and recovery services.
Mismanagement Claims
Democratic mismanagement, according to critics, is to blame for California’s deficit, raising doubts about the viability of the state’s progressive paradigm. This discourse is heightened by Newsom’s quest for national relevance.
This caused unpredictability in the amounts of income and capital gains taxes that would be generated affecting the state budget. Compounding these challenges are the economic consequences of the pandemic.
The Drought Continues
It is still coming out of a period of drought that hit the state of California from the year 2012 to 2016. Some gains have been reported in the replenishment of water sources, however, the state is not prepared for another drought.
Certain specialists have even raised the alarm, stating that California is a “state of emergency”. Given the wildfires, the deficient infrastructures, and so forth.
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Budget Reduction
Some of the key issues that have emerged from the Democrats include budgetary issues. It shows how hard it is to manage spending while addressing social program promises.
This internal conflict exemplifies the challenges of governing a solidly blue state. California is cutting $16 billion in spending to close its $46.8 billion deficit. Everything from prison funds to housing budgets is impacted by these reductions. To get back on solid financial ground, these are difficult but vital decisions.
Loss of Faith in Government
The confidence of the public in the government has never been this low in California. Due to corruption cases and mishandling of resources in Sacramento, most people in California are slowly turning away from their leaders.
The gap between the wealthy and the poor is still growing wider in California. This is particularly true under the governorship of Gavin Newsom. The rich man lives their lavish life while the middle-class and working-class families are struggling to put food on their table.
Planning For Stability
Governor Newsom and other state officials are supporting California’s long-term financial plan.
To safeguard the state from potential economic downturns, they want to improve reserves and plan for the following two fiscal years, which should increase stability.
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