LOS ANGELES | California, fifth world economy by itself, provides for this year a deficit of $ 54 billion because of the economic impact of the pandemic and will need to make cuts to compensate for these losses, said Thursday the democratic governor of the State.
“The COVID-19 required the California and the other economies of the country an unprecedented economic crisis, with the key to the destruction of jobs and loss of income massive,” said governor Gavin Newsom.
“Today, our budget reflects this “emergency” -he said, presenting a new draft budget, taking into account the revenue losses caused by the pandemic, down more than 22 % relative to the accounting baseline.
The revised budget is focused on health, security and education, with emergency measures for employees and small businesses the time for the economy to recover.
“But difficult decisions await us,” said the governor Gavin Newsom, who is said to have had to solve to reduce a number of special programs aimed at the poor or migrants, and to reduce subsidies to public education.
The new budget also proposes a reduction in salaries of 10 % for all State employees effective July.
In January, California was counting on a budget surplus of $ 6 billion and enjoyed a very low unemployment rate.
With the closures caused by the pandemic, approximately 4.6 million Californians are registered as unemployed since 12 march, and the unemployment rate is expected to reach a peak of 18 % this year. “It’s simply unprecedented,” said Gavin Newsom.
The democratic governor has also warned that further budget cuts would be necessary if the federal government’s help was not at the rendezvous.