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California has a multibillion-dollar budget deficit. Here's what you need to know

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California has a multibillion-dollar budget deficit. Here's what you need to know


SACRAMENTO, Calif. (AP) — California has a huge budget problem that could force thorny decisions from Democratic leaders who enjoyed a more than $100 billion surplus just three years ago.

This is the second year in a row the nation’s most populous state is facing a multibillion-dollar shortfall. State revenues have continued to fall amid increasing inflation and a slowdown in the state’s usually robust technology industry.

Democratic Gov. Gavin Newsom on Friday announced his plan to address the deficit in the state’s budget. The release of his plan kicks off a budget negotiation marathon with Democratic lawmakers, who hold supermajorities in both chambers.

Newsom and lawmakers have until June 15 to pass a budget, or lawmakers don’t get paid.

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HOW BIG IS THE BUDGET?

Newsom proposed a $288 billion spending plan on Friday for the fiscal year that starts July 1. That is well below the nearly $311 billion budget he signed into law last year. But it is still by far the largest of any state in the country. New York recently passed a $237 billion budget, and Texas and Florida spend far less annually.

WHAT ABOUT THE DEFICIT?

It’s complicated. Newsom announced on Friday a $26.7 billion deficit, but it’s really closer to $45 billion. That’s because Newsom didn’t include roughly $17.3 billion worth of actions he and lawmakers already agreed on. Those included a cut of $3.6 billion in primarily one-time funding to some school, welfare and climate programs. The plan also delays and defers about $5.2 billion in spending for various programs, including $1 billion to fund rail and public transit systems.

WHY DOES THE DEFICIT MATTER?

California’s constitution requires lawmakers and the governor to balance the budget — meaning the state can’t spend more money than it has. That means they have to either find more money by raising taxes, which Newsom doesn’t want to do, or find ways to cut, shift or delay spending. Newsom’s proposal focuses mostly on cuts, but it will also dip into reserve funding.

WHAT ARE THOSE CUTS?

Newsom proposed cuts across 260 state programs. Here are some of the highlights:

    1. Eliminating 10,000 vacant state worker jobs for a saving of $762 million. Newsom didn’t immediately provide a list of all the jobs.

    2. Clawing back $6.7 billion previously set aside to pay doctors more to see poor patients and immigrants.

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    3. Shaving off nearly 8% in operating costs to almost all state agencies through actions like getting rid of landlines in state offices and evaluating printing needs.

    4. Cutting $2 billion from broadband initiatives to pursue cheaper options

    5. Closing housing units with 4,600 beds across 13 state prisons to save $81 million.

    6. Reducing funding for homelessness and housing initiatives by nearly $1.2 billion, including $474 million from an anti-foreclosure program to preserve existing affordable housing.

    7. Reducing $500 million in water storage funding. He didn’t offer specifics on how that would be applied.

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    8. Shutting down an in-home service care program that serves 14,000 low-income, undocumented immigrants with disabilities for a savings of $94.7 million

    9. Cutting roughly $2 billion from six education programs, including $550 million from an initiative to upgrade preschool and kindergarten facilities and $510 million in scholarships for middle class college students pursuing a teaching credential.

    10. Eliminating $352.5 million in funding for state and local public health and $189.4 million from mental health services fund.

HOW ABOUT TAX INCREASES?

Newsom has repeatedly said he could balance the budget without raising taxes. But his proposal calls for the suspension of the widely used net operating loss tax deduction for businesses the following fiscal year, which some are seeing as a tax increase.

He is also increasing the tax on managed care organizations, the private companies that contract with the state to provide Medicaid benefits.

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Teen dies after losing control of electric motorcycle in Garden Grove

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Teen dies after losing control of electric motorcycle in Garden Grove


A 13-year-old boy riding an electric motorcycle in Garden Grove died after veering into the center median, flying into the air and then slamming onto the roadway, authorities said.

The crash took place shortly before 10 p.m. Thursday in the area of Magnolia Street and Larson Avenue, according to the Garden Grove Police Department. The Police Department received word of the incident via a call from Life360, a family safety and location-sharing app with emergency assistance features.

The Santa Ana teen was critically wounded in the crash, police said. He was loaded into an ambulance and taken to a hospital, where he was later pronounced dead.

The boy was traveling at around 35 mph on a black E Ride Pro electric motorcycle when he struck the median and lost control of the vehicle, according to authorities. Electric motorcycles are primarily designed for off-road riding and are not legal to use on California roadways.

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The teen’s death is the latest in a spate of serious collisions involving electric motorcycles and dirt bikes — some of which have led to serious injuries, death or charges for parents who allegedly allowed their minors to illegally ride the speedy devices.

An Orange County mother was charged with involuntary manslaughter last week after authorities said an 81-year-old Vietnam veteran died from injuries he suffered when her 14-year-old son slammed into him while riding an e-motorcycle, then fled the scene.

In April, a Yorba Linda father was charged with felony child endangerment after authorities alleged his son ran a red light and was hit by a car while riding a modified e-motorcycle capable of reaching up to 60 mph.

Last week, a 19-year-old riding an e-motorcycle was arrested on suspicion of felony evading police and felony reckless driving. He was accused of leading sheriff’s deputies on a speedy chase through a residential area of Oceanside, blowing past multiple red lights and knocking a deputy off a motorcycle.

Electric bikes, motorcycles and dirt bikes have surged in popularity in recent years and are especially popular among teens. However, while e-bikes generally top out at 28 mph and are legal to ride on the street, many e-motorcycles can go twice as fast and are generally not street legal.

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Anyone who witnessed Thursday’s crash in Garden Grove or has a video of the incident is asked to contact Investigator Lang via phone at (714) 741-5823 or email at mlang@ggcity.org.



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California to give newborns free diapers. What it means for families

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California to give newborns free diapers. What it means for families


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Gov. Gavin Newsom announced that newborn babies in California will start receiving free diapers as part of a new “first-in-the-nation” initiative to support families across the state with the rising cost of living.

Newsom, along with state leaders, met in San Francisco on Friday, May 8 to unveil California’s new partnership with Baby2Baby, a national nonprofit that provides diapers to children in need, and to explain how this new program will provide families with 400 “high-quality” diapers before they leave the hospital.

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Over the last six years, families have seen the average cost of diapers increase by 45% or “thousands plus dollars a year,” which has made raising a family unattainable for some, Newsom said during the press conference.

“Every baby born in California deserves a healthy start in life — and that means making sure parents have the basics they need from day one,” Newsom said. “One out of four families skip meals in order to pay for diapers.”

“The biggest problem defined universally, in our cities, our state and our nation, is the issue of affordability. This is what affordability looks like; it’s not a slogan, it’s a box. A box of diapers,” Newsom added.

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This new effort will be known as Golden State Start, as California uses its bulk purchasing power to obtain 40 million high-quality diapers in hopes of easing financial strain for families and supporting infant health by helping parents maintain an adequate supply of clean diapers.

“The first days at home with a newborn should be focused on the love, connection, and joy of an expanded family, not stress about affording diapers,” said Kim Johnson, secretary of the California Health and Human Services Agency. “This program helps ensure families can begin that journey with greater stability and peace of mind.”

The program is expected to start at the beginning of this summer in participating California hospitals. The list of participating hospitals was not released at the time of publication, but Newsom noted that the state was in talks with at least 60 hospitals across California.

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During the first year of the program, CalRx and Baby2Baby noted that they would prioritize hospitals that serve large numbers of Medi-Cal patients to ensure low-income families benefit early from the program. The state plans to scale the program to additional hospitals and birthing centers over time.

Newsom noted that this program is expected to grow: In 2027, the state is set to purchase 80 million diapers from manufacturers, with the goal of eventually purchasing up to 160 million.

“California families deserve to feel supported during one of life’s more exciting, yet vulnerable transitions,” Jennifer Siebel Newsom, the first partner, said in a press release. “Golden State Start will deliver immediate relief, allowing parents to focus on what matters most — caring for their newborn. Together with Baby2Baby, we can ease the financial burden on California parents while supporting healthier outcomes for babies and their mothers.”

Noe Padilla is a Northern California Reporter for USA Today. Contact him at npadilla@usatodayco.com, follow him on X @1NoePadilla or on Bluesky @noepadilla.bsky.socialSign up for the TODAY Californian newsletter or follow us on Facebook at TODAY Californian.



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Nordstrom Rack expands in Southern California with new stores

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Nordstrom Rack expands in Southern California with new stores


Nordstrom Rack will open two new Southern California stores next year.

The discount outlet said on Wednesday that it will open new stores in Marina del Rey in the spring of next year and in Torrance later that summer. The locations join 69 Nordstrom Rack locations already operating in the state.

“We’re excited to grow our footprint in the Los Angeles market and introduce new customers to the Nordstrom experience,” Gemma Lionello, president of Nordstrom Rack, said in a news release.

Nordstrom Rack is an outlet version of the upscale retailer Nordstrom, offering merchandise from top brands at a discount.

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Bargain retailers have expanded in California recently, benefiting from increasingly cost-conscious customers, who are motivated to spend less by economic anxiety and inflation.

Discount outlets such as Ross, T.J. Maxx and Dollar General have capitalized on the tough economic times and experienced accelerated growth. Ross reported record sales in 2025, up 8% from the year prior.

Bargain retail stores have acquired a larger supply of discounted products by buying unsold merchandise from struggling high-end stores. Customers who feel destabilized financially by tariffs and global conflict have used the stores to try to find lower prices.

The new Nordstrom Rack storefronts will be in Marina Marketplace in Marina del Rey and Rolling Hills Plaza in Torrance.

“The Los Angeles retail market continues to see growth from retailers like Nordstrom looking for anchor space in vibrant areas,” Scott Burns, senior managing director for the company that manages Marina Marketplace, said in a news release.

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The bargain outlet boom comes as department stores and malls struggle. Nordstrom, the upscale retailer, closed a Santa Monica location in July. Macy’s shuttered two California locations this year and will reduce its footprint by 30% in 2027.

Shopping malls across Southern California have also struggled to bring sales back as immigration raids continue to scare customers away.



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