Of the sum, RM374.72 million has been set aside for development, which will be allocated to nine departments.

Chief minister Chow Kon Yeow said the deficit budget will be offset by the reserves and trust account, which had a balance of RM1.67 billion as of Nov 15.

Justifying the deficit budget, Chow said his government was taking disciplined efforts to control spending.

This was reflected in the state’s actual operating expenditure this year which stands at RM709.2 million as of Nov 15, which was lower compared with original target of RM989.4 million.

Despite the fiscal limitations which had led to a widening deficit gap, he said, the state government remained committed to formulating and implementing projects and programmes to stimulate the socio-economic growth of the state.

“As a concerned government, the essence of the budget emphasises the agenda of stimulating the state’s economic growth and socio-economic development, as well as improving the people’s well-being,” he said when tabling the 2024 budget in the state assembly.

“The state government promises to continue governance practices based on the principles of competency, accountability and transparency to maintain Penang as a state with a clean and dynamic leadership.”

Chow said the government expects to collect RM533 million in revenue next year, a 2% increase over this year.

This comprises 31.5% from tax revenue, 52.13% from non-tax revenue, and 16.37% from non-revenue receipts.

He anticipated growth in direct taxes and non-tax revenue.