The Legislative Analyst’s Office will produce independent revenue projections and policy suggestions as more data pours in. Following the usual process, lawmakers will hold dozens of hearings to evaluate the governor’s ideas and recommend their own before their June 15 deadline to pass a budget. And California isn’t alone facing a shortfall - about half of Americans live in states now grappling with budget gaps, ongoing deficits, or both, according to an analysis by The Pew Charitable Trusts.īut many of the proposals outlined today will undoubtedly change in the months ahead. Unlike the federal government, most state governments, including California, must approve balanced budgets - running a deficit isn’t an option. Last year, Newsom proposed spending $297 billion the final total in June was upped to $310 billion.Ībout 70% of California’s total state spending would go toward public schools, colleges and health and social services - a trend that’s held steady since the 1970s, according to a CalMatters review of state budget data. But January plans are often revised considerably.

$5.7 billion in internal borrowing from special funds to support the tax on health care providers.īut he said he wants to protect investments in addressing homelessness, mental health reform, and public safety.Īll told, Newsom is proposing a total state budget of $291.5 billion - about $19 billion less than what he and lawmakers approved last June for 2023-24.

And deferring another $2.1 billion to 2025-26, including about $500 million in additional funding for University of California and California State University.

Delaying $5.1 billion worth of spending, including on transit.

Cutting $8.5 billion from existing programs and services, including climate, housing and education.

Withdrawing $13.1 billion from the budget stabilization and safety net reserve accounts.

Newsom’s plan to close the deficit includes:

Basically, the administration is less concerned than the analyst’s office about an impending recession, added Joe Stephenshaw, Newsom’s budget director. “We’re just a little less pessimistic,” said Newsom, who repeatedly criticized the news media’s reporting on the Legislative Analyst’s Office’s figure. His deficit projection is far less dire than last month’s outlook from the nonpartisan legislative analysts, who projected that the state is eyeing a $68 billion deficit for the 2024-25 fiscal year, which starts July 1.Ĭrucially, Newsom’s team is assuming $15 billion more in revenues than the legislative analysts, explaining much of the difference in forecasts, based on the resilience of the economy.

He called it “a story of correction, a story of normalization after a period of tremendous amount of distortion.” Gavin Newsom, who said today he will declare a fiscal emergency if necessary and unveiled his initial plan to dig the state out of a fiscal chasm for the second year in a row.īut Newsom painted it as a return to a more normal budget, after recent spikes in revenue.

How deep? A projected $38 billion deficit, according to Gov. California is in a budget hole, its depth measured not in feet, but in dollars.

Budget with day planner calendar