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Newsom proposes billions in budget cuts as coronavirus tears economic hole in California

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SACRAMENTO, Calif. (KRON) — Governor Gavin Newsom is proposing billions in budget cuts as the coronavirus tears an economic hole in California.

As California faces a $54 billion dollar budget deficit, Governor Newsom prepared for pay cuts and planned to throw out proposed programs.

“This is not an ordinary time, and in consequence this is not an ordinary budget presentation,” he said.

Governor Newsom Thursday presented his proposed version of the state budget, axing $19 billion from his original spending plan in January as the states economy struggles amid the coronavirus.

Newsom anticipating unemployment could peak at 24.5% in California, with a 22% drop in overall state revenue.

The $133.9 billion budget keeps some programs like boosts to minimum wage and maintaining the state’s earned income tax credit for working families — along  with continued commitments to health and public safety.

But the governor prepared to throw out 6.1 billion in program expansions and new proposals, including extending state health insurance to undocumented seniors.

The governor also proposed to cut state worker pay, including healthcare workers and public safety personnel by 10%, his own salary also included.

“You will hear of cuts that make none of us proud,” Newsom said. “But the values nonetheless, we are holding onto.”

For now, Newsom plans to use $16 billion from California’s emergency rainy day fund over the next three years.

The governor, pleading for help from the president and federal government to help curb about a quarter of California’s possible cuts.

State financial experts say those federal dollars would need to be promised before the budget goes into effect July 1.

“These are cuts that could be triggered and eliminate with a stroke of a pen. The president of the United States could provide support for speaker Pelosi’s Heroes Act, and these cuts would be eliminated,” Newsom said.

The governor and the legislature have a month to come to an agreement on the state budget.

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