Gov. Gavin Newsom's proposed budget revision relies heavily on rainy day funds, spending cuts and the hope for more federal relief to patch over the biggest deficit in state history.
But there's one glaring omission - higher taxes.
The governor's failure to propose increasing taxes and fees struck Chris Hoene, executive director of the California Budget and Policy Center in Sacramento.
"They've left one part of the toolbox unused so far which is they haven't really talked about the use of new revenues in order to make up some of the shortfall and/or to invest helping in some of the people who are actually struggling because of COVID-19," Hoene told KCBS Radio's Doug Sovern on "The State Of California" Thursday.
Although there are no new taxes proposed in @GavinNewsom's #MayRevise of the #CABudget, he does propose to cap tax credits at no more than $5m per taxpayer.(Amazingly, that could generate $4.4B, so that's essentially a tax hike for many people who are much richer than I am)
— sovernnation (@SovernNation) May 14, 2020Hoene said it's entirely reasonable for Gov. Newsom to count on federal aid from Washington, D.C., which he believes will be delivered.
"The reality is that every governor in the nation is going to be telling members of Congress the same story," Hoene said. "California is telling that story a bit earlier than some of the other states because of the way our (budget) process works, but this story of shortfalls, budget cuts and impacts on the folks who are in the most need right now isn't going to be a red state or a blue state story, it will be an American story."
Hoene thinks Congress will compromise on additional assistance in the coming weeks.
Gov. Newsom hopes that happens before the June 15 deadline for the State Legislature to pass the budget or lawmakers may pressure him to generate more tax revenue, something he's reluctant to do during a recession where unemployment could hit a projected 25%.
