Economy

Calif. leaders unveil plan to shrink budget shortfall

Gov. Gavin Newsom’s office estimated the hole to be about $38 billion.
California Gov. Gavin Newsom discusses his proposed state budget for the 2024-2025 fiscal year, during a news conference in Sacramento, Calif., Wednesday, Jan. 10, 2024. (AP Photo/Rich Pedroncelli)

California Gov. Gavin Newsom (D) and legislative leaders on Thursday announced plans to shrink the state’s $38 billion-plus budget shortfall by about $17 billion, using low-hanging-fruit strategies before budget talks begin in earnest.

The proposed package relies on spending cuts, delays, deferrals and cost-shifts, and would raise $3.8 billion by increasing taxes on health insurance plans.

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