Governor Gavin Newsom has declared that the state is on track to achieve a "modest" budget surplus in 2025 after two consecutive years of deficits. Unveiling his $322.2 billion budget proposal this week, Newsom assured that the plan avoids both cuts to core programs and tax hikes, as stakeholders begin to react to the details.
The brighter fiscal outlook is attributed to a $16.5 billion surge in state tax revenues, driven by strong stock market performance and investment returns. Additionally, the proposal includes $17 billion drawn from reserve funds.
Newsom will formally present the budget to the legislature on Friday, with lawmakers and the governor facing a June deadline to finalize details.
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