Today, Gov. Gavin Newsom released his projected 2023-24 budget totaling $297 billion in spending – $11 billion less than last year’s record budget. Gov. Newsom announced his plan in a relatively brief, 60-minute presentation followed by a news media Q&A before departing to tour storm damage along California’s Central Coast.
Unlike previous years when California has started the year with an abundant surplus, this year’s plan relies on funding delays and borrowing to mitigate a projected $22.5 billion shortfall due to a drop in capital gains and personal income taxes. In his morning presentation, Gov. Newsom emphasized the importance of California keeping its promises while building a budget that addresses the anticipated deficit.
Gov. Newsom will revise his initial spending plan in May based on updated projections and will work with the Legislature toward passing a final budget by the June 15 deadline.
The full budget is available here. Below are some quick highlights from today’s announced spending plan:
1. Funding Shifts and Reduced Spending Avoid Dipping Into the State’s Reserves
The plan avoids touching California’s rainy-day reserves by balancing the budget through a combination of funding delays ($7.4 billion), reductions ($5.7 billion), fund shifts ($4.3 billion), trigger reductions ($3.9 billion) and borrowing ($1.2 billion).
2. Climate Change and Transportation Funds on the Chopping Block
Gov. Newsom’s budget reduces spending on some proposed climate and transportation programs. Potential funding from the federal Inflation Reduction Act could help offset the cuts. Notably, if state revenues are up next year, some reductions could be restored in the 2024-25 budget.
3. Funding for Key Budget Sectors Protected
Areas avoiding budget cuts in the plan include K-12 education, higher education, homelessness, healthcare access, public safety, economic development and wildfire, drought and flood mitigation.
4. New Investments to Combat Fentanyl and Invest in Flood Infrastructure
The plan does increase funding to address two key crises facing the state. $97 million would go toward new investments to combat the opioid and fentanyl crisis. Meanwhile, $202 million was proposed in new flood mitigation investments as the state faces a barrage of January storms.
Thousands of Californians streamed Gov. Newsom’s budget presentation today. The following #CABudget and #CALeg posts received high engagement:
Senate President pro Tempore Toni G. Atkins:
.@CAGovernor’s proposal is an important first step in the critical #CABudget work ahead, and a preview of what the @CASenateDems are doing to #ProtectOurProgress. Statements from Budget Chair @NancySkinnerCA and me → https://t.co/xOibs0DSTT pic.twitter.com/nn2IiLSc9J
— Senator Toni Atkins (@SenToniAtkins) January 10, 2023
First Partner Jennifer Siebel Newsom:
To truly invest in economic development you have to acknowledge the cost of childcare. Thank you @GavinNewsom for proposing a #CAbudget that expands childcare to give more parents and caregivers peace of mind as they work to provide for their families. pic.twitter.com/AKRGp1Tqxi
— Jennifer Siebel Newsom (@JenSiebelNewsom) January 10, 2023
Los Angeles Times’ Politics Reporter Hannah Wiley:
#Cabudget: Newsom said there will be “no cuts” to spending on homelessness, & promises greater accountability for how this money is used.
“We want to see it put to good use. People want to see results, they demand results, I want to see results, I demand results,” he said. pic.twitter.com/N4CjU3Q51X
— Hannah Wiley (@hannahcwiley) January 10, 2023