Faced with ongoing inflation and a persistent public health crisis, Gov. Newsom announced his May Revise for the 2022-2023 budget, totaling a record $300.7 billion in spending.
The May Revise – supported by a record-breaking $97.5 billion budget surplus – increases spending by $14 billion from the initial budget proposal. The Legislature is now tasked with finalizing a budget to be submitted to the Governor for approval by the June 15 deadline.
The full budget can be found here. Below please find some key highlights:
The May Revise includes $18.1 billion for direct financial relief programs for Californians, with a one-time, $400 refund to eligible vehicle owners as the centerpiece of the plan. These refunds would be capped at two per registered owner, for a total of $800. Newsom’s updated proposal also includes $2.7 billion in emergency rental assistance and $1.4 billion to help Californians pay past-due utility bills.
In support of the state’s SMARTER Plan for the next phase of combatting COVID-19 and in addition to $1.25 allocated in January’s budget proposal, the May Revise adds $1.1 billion for medical surge staffing, vaccines and boosters, securing antigen test kits and supporting rapid testing sites, and prioritizing protecting California’s most vulnerable populations, amongst other activities.
The May Revise allocates $8 billion over five years to maintain grid reliability, accelerate clean energy projects and innovation, and provide relief to ratepayers. This is in addition to the initial $2 billion allocated in January to incentivize long-duration storage projects, renewable hydrogen, and decarbonization projects.
The May Revise includes an additional $1.3 billion for drought resilience and response initiatives to address the drought while building a more climate-resilient future. Newsom noted that “the entire west coast of the U.S. is in the midst of a mega-drought.” Also included is an additional $1.2 billion investment over two years to implement the state’s wildfire and forest resilience strategy to continue reducing the risk of wildfires.
Housing and Homelessness
Gov. Newsom’s May Revise includes $9.1 billion for housing resources and $9.4 billion in resources for those experiencing homelessness, including funds to convert malls and office buildings into housing. These efforts to address homelessness are aligned with the state’s new housing goal to add 2.5 million units by 2030. Newsom called addressing homelessness “the numbers one, two, three and four top priorities” in California.
The May Revise includes $128.3 billion in funding for students in transitional kindergarten through high school, a record $22,850 per student. This allocation includes $21.6 billion in fee waivers for children and families participating in the State Preschool Program.
Gov. Newsom’s May Revise outlined a 5% base general fund increase in each of the next five years across the UC, CSU and California Community Colleges systems. The funding increase plans were developed by the systems’ leaders and the Governor’s Office to meet broad access, affordability and equity goals. Newsom said “there is no greater conveyor belt of opportunities and dreams” than the state’s higher education systems.
The May Revise allocates $2.1 billion to encourage businesses to invest in and relocate to California. Additionally, $75 million is dedicated to supporting small agricultural businesses impacted by California’s drought and $150 million is dedicated to COVID-19 relief.
The May Revise also includes allocations toward lowering healthcare costs, healthcare worker retention, adult and child mental and behavioral health, and public safety, with a focus on combating fentanyl trafficking and ghost guns. For a full breakdown, please see the complete May Revise document here.