The agreement reached by California Gov. Gavin Newsom, Senate President Pro Tem Mike McGuire, and Assembly Speaker Robert Rivas addresses a $46.8 billion budget deficit. This agreement aims to set the state on a path for long-term fiscal stability, addressing the current shortfall while strengthening budget resilience for the future. The plan spans the next two fiscal years to help balance the budget moving forward, following a previous “budget bill junior” that solved an additional $17.3 billion in shortfalls. The agreement includes $16 billion in reductions, with cuts in various areas such as state operations, housing, education, and healthcare workforce programs. Revenue projections in the budget include suspending a tax credit for businesses and increasing a tax on health care plan providers. Reserves, funding shifts, delays, and deferrals will also be utilized to help balance the budget. Additionally, some programs have been restored from prior cuts, such as grants for homelessness assistance programs and funding for housing and climate-related planning programs. The budget reflects a commitment to Californians’ priorities and aims to prioritize affordability and long-term stability.
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