© 2025 | Jefferson Public Radio
Southern Oregon University
1250 Siskiyou Blvd.
Ashland, OR 97520
541.552.6301 | 800.782.6191
Listen | Discover | Engage a service of Southern Oregon University
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

Legislative Analyst says Newsom should go further to increase rainy day funds

FILE: The California State Capitol, Aug. 5, 2024, in Sacramento, Calif.
Juliana Yamada

/
AP Photo
FILE: The California State Capitol, Aug. 5, 2024, in Sacramento, Calif.

California Governor Gavin Newsom is proposing two changes to how the state puts away money, but the Legislative Analyst’s Office says he should do more to keep the budget balanced in leaner years.

Newsom is suggesting two changes this year to the way the state saves money for leaner times. California’s Legislative Analyst’s Office, the research arm of the legislature, said the changes are good, but he should be asking for more.

Newsom said in his budget proposal earlier this year he wants to do two things: first, make funds the state puts into savings not count as spending, so California doesn’t exceed its spending limits when it saves.

The second: change the size of the account those funds go into – it currently caps savings at 10% of general fund taxes, and he wants to raise it to 20%.

The LAO released a report saying he should push that to 50%, but do it gradually.

“California's revenues are volatile,” said LAO Chief Deputy Carolyn Chu. “In part, that reflects the preference of the voters that have approved more progressive income taxes that levy higher rates on individuals whose incomes are more prone to fluctuate.”

She also said changing the size is just the beginning.

“Then you need a way to fill that bigger bucket with additional revenues,” she said.

The report suggests the state put more money away in lucrative revenue years or set more aside in capital gains taxes.

The legislature is considering a bill with Newsom’s proposals to save more money but it hasn’t had a hearing yet.

If lawmakers approve the measure, it’ll go to voters next.

Megan Myscofski is a statehouse/politics reporter at CapRadio, a JPR news partner. Previously, she covered public health at KUNM in New Mexico and Economics at Arizona Public Media in Tucson.
Public media is at a critical moment.

Recent threats to federal funding are challenging the way stations like JPR provide service to small communities in rural parts of the country.
Your one-time or sustaining monthly gift is more important than ever.