SACRAMENTO, Calif. — With a $38 billion budget deficit to solve, there are more losers than winners in the plan put forward Wednesday by Gov. Gavin Newsom.
But it could be worse, much worse: By projecting higher revenues, Newsom estimates a deficit about half the size of the $68 billion figure last month from the Legislative Analyst’s Office. And by dipping into the state’s reserves to the tune of $13 billion, his proposed budget includes fewer significant spending cuts, explain CalMatters’ Mikhail Zinshteyn and Sameea Kamal.
And advocacy groups for some state-funded programs expressed relief that they have been spared deep spending cuts, so far.
Still, there are some losers:
Climate action programs: Newsom proposed slashing funding for programs aimed at tackling or adapting to climate change to about $48.3 billion, or by 7% from last year, writes CalMatters climate reporter Alejandro Lazo. And despite ambitions for the state to reach zero emissions by 2035, the governor proposed delaying $600 million in spending on electric vehicles by three years, including the electric car rebate program aimed at getting more lower-income residents to purchase them.
- Mary Creasman, California Environmental Voters chief executive, in a statement: “We can’t backslide or slow down while the climate crisis speeds up. We need our state leadership to do more, not less.”
Health care workers: One of the biggest wins labor notched this past session was passing legislation to raise the minimum wage to $25 for health care workers, with the first pay increases rolling out in June. But as CalMatters health reporter Ana B. Ibarra explains, the governor is proposing to delay those raises until the state’s fiscal outlook is better. Though his administration did not disclose this contingency when he signed the law last year, Newsom said the bill’s backers had agreed to tie the wage increase to the state’s budget prospects. Whenever the wage boost does go into effect, it is expected to boost close to 500,000 health care workers in California.
- David Huerta, Service Employees International Union California president, in a statement: “SEIU California looks forward to working with the Administration and the Legislature to ensure that these critically needed workforce investments are implemented while maximizing federal funds and holding the healthcare industry accountable for investing their resources in their workers and in patient care.”
Homelessness: For the fourth year in a row, pleas for ongoing funding to address homelessness programs would go unanswered. That’s something that has frustrated city and county leaders, as well as service providers, for years, according to CalMatters homelessness reporter Marisa Kendall. Relying on one-time grants makes it difficult to plan ahead and invest in long-term programs, they say.
- Sharon Rapport, director of California state policy for the Corporation for Supportive Housing: “Without ongoing consistent funding, it means we’re going to have a dysfunctional homeless response system because our homeless response system never knows how much funding is coming from the state.”
Migrant aid: Last year, Newsom and lawmakers planned to spend $150 million on humanitarian services for migrants who were released from short-term federal custody at the border. But none of that money remains in the governor’s budget proposal, leaving nonprofits in San Diego and Imperial counties continuing to struggle as they offer assistance to the influx of tens of thousands of people who have crossed the border.
- Masih Fouladi, California Immigrant Policy Center executive director: “We strongly encourage and advocate for state leaders to prioritize what’s happening (at the border) and the impact it’s having on the (non-governmental organizations) on the ground that are doing the work.”
For more analysis and reaction, read the budget overview story by Mikhail and Sameea.
A final reminder: What Newsom outlined Wednesday is only the first take on the budget. The Legislature will hold hearings and weigh in before the governor unveils his revised plan in May, after updated tax revenue numbers. The Legislature has until June 15 to pass a balanced budget, and legislators and Newsom have until July 1 to agree on a final 2024-25 spending plan.
CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.
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