Governor Newsom faces tough budget conversation with state lawmakers over $31.5B gap.

Proposed spending plan of $306.5B includes shifting money, borrowing from special funds, and cutting spending

Cuts will mainly impact state's climate and transportation budgets, but new spending on flood protection, public safety, and university systems 

California's volatile tax structure heavily relies on highest earners, affected by national and international issues impacting the economy

Democratic leaders suggest raising taxes on giant corporations or tapping into rainy day fund, which Newsom rejects due to uncertainty 

Budget path of California is unsustainable, according to Republicans, who call for preparation for economic slowdowns 

Legislature must pass state budget by June 15th, going into effect on July 1st

Governor expected to announce proposals to speed up housing and climate-related projects next week

Governor expected to announce proposals to speed up housing and climate-related projects next week