Elon Musk Berates Gavin Newsom After California Governor Discloses Plans To Cut 10,000 Vacant State Jobs To Address $27.6B Deficit: 'This Is Bizarre On So Many Levels'

Tesla and SpaceX CEO Elon Musk expressed his bewilderment at Gavin Newsom, the governor of California, for his decision to eliminate 10,000 vacant state jobs.

What Happened: On Friday, Newsom announced his plan to cut 10,000 unfilled state jobs to address the $27.6 billion deficit. This move is part of a larger strategy to reduce state spending by $32.8 billion over the next two fiscal years.

A user on X, formerly Twitter, mockingly commented on the development saying, “So Gavin Newsom is going to slash 10,000 imaginary jobs to make up for the $27B of magically missing money that was supposed to go to solving the very real homeless problem. Got it.”

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In response, Musk said, “This is bizarre on so many levels.”

Newsom’s office said that this proposal will not involve tax hikes and will safeguard funding for essential social service programs. The deficit is largely attributed to fluctuations in the stock market and inaccurate forecasts for the state’s three primary revenue sources: personal income taxes, corporate taxes and sales taxes.

During a press conference, Newsom acknowledged the challenges posed by the state’s tax structure and the impact of economic contractions on the budget.

“This is just a reminder of the totality of the challenges on the basis of the volatility of our tax structure,” he said, adding, “The benefits of a progressive tax system during good years, the challenges during years where things are contracting.”

Why It Matters: In January, Newsom, serving his second term, put forward a $208.7 billion proposal aiming to reduce the state’s general fund budget by nearly 10% compared to the current fiscal year. This move was intended to address an estimated $38 billion deficit.

However, his revised spending plan, unveiled on Friday and based on the latest revenue data known as the May Revision, suggests even more substantial reductions. Newsom now projects the state’s general fund to decrease to $201 billion for the upcoming fiscal year starting on July 1, reported Bloomberg.

This development comes in the wake of widespread criticism of the cost of providing tiny houses for the homeless in San Francisco. The city’s residents have expressed outrage over the exorbitant expenses incurred in this initiative, further highlighting the challenges faced by the state in addressing its homelessness crisis.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Photo: Shutterstock

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