Governor Newsom Unveils $297 Billion Budget Proposal with $22.5 Billion Deficit

California Gov. Gavin Newsom on Tuesday unveiled a $297 billion 2023-24 budget plan with a $22.5 billion projected deficit.

California has run a large budget surplus over the past few years, with $38 billion reported in fiscal year 2021-22 and $97.5 billion in fiscal year 2022-23. However, after the post-COVID economy finally stabilized and the state lost both businesses and population in recent years, government revenues fell as many predicted, leading to budget cuts.

In a statement Tuesday, Newsom noted that funding for California’s essential services will continue as usual, as well as through education through the continuation of free lunches for all student programs and the introduction of universal kindergarten. Funding for the homeless, housing programs, expanding Medi-Cal, cutting drug costs, improving mental health programs, climate change programs, combating the use of drugs such as fentanyl, fighting crime, and supporting economic development and small businesses were also mentioned in continued funding. .

“As our state and country face economic headwinds, this budget supports the state’s strong economic foundation by continuing to invest in Californians, including transformative funding to provide universal preschool education, expand access to health care for all, and protect our communities,” the Governor said. Newsom. Tuesday. “In partnership with the Legislature, we will continue to prioritize the issues that matter most to Californians while building a solid financial foundation for the state’s future.”

While most major programs have avoided significant cuts in supply, the overall reduction in climate programs has occurred despite Newsom’s claims to the contrary. Some of the money was quickly transferred to flood control programs after major floods and rains hit California since late December. $135.5 million went to flood risk reduction in cities, and another $40.6 million went to build dams across the state. $25 million will also go towards flood risk reduction in the Central Valley.

“The most important thing is investment in floods,” Newsom added. “After that, I will go to the Central Coast.

Drought was also a major factor in the budget, with a $125 million increase going to the drought fund and $31.5 million to water rights. More funding has also been directed to groundwater recharge projects and other water projects.

However, big cuts were also seen in the budget. $24 million was allocated to a water resiliency project, with $270 million set aside for the same project. At the same time, the permanent chemical cleanup project was significantly reduced by $70 million. Other water projects, such as the water refueling project, have been phased out entirely, and water recycling and solar panels programs have been scaled back.

Zero emission car programs also fell 11% to $1.1 billion, with another $3.1 billion in funding for similar programs deferred. Another $4.3 billion of the zero-emissions program will also be reallocated to save it from being cut, moving from a general fund to a separate fund paid by polluters.

Regardless, Newsom said on Tuesday that “we are delivering on our promises” and that the state will still have $35.6 billion in reserves after the budget. At the press conference, Newsom also promised not to touch the reserves and wanted to wait until May to make any final budgetary decisions when the budget should be revised.

“We are not touching reserves because we have a wait-and-see approach to this budget,” Newsom continued. “We are in a very unstable moment. The budget will be reviewed in May when there is more clarity.”

Mixed reactions to Newsom’s budget proposal

Democrats broadly approved Tuesday’s proposed budget, as there were no major cuts and there was still plenty of room to make necessary adjustments.

Senator Nancy Skinner. (Photo: Kevin Sanders for the California Globe)

“We’ve funded at such record levels, and a lot of the programs we’ve funded haven’t even launched yet, so we still have room to make some adjustments if necessary,” said Senator Nancy Skinner (D-Berkeley). “I am very optimistic because we are in good shape.”

Other groups such as the California Retailers Association (CRA) were also positive about the budget proposal, noting that more funds are being directed towards combating retail theft and protecting the retail industry.

“CRA applauds Governor Gavin Newsom for recognizing in his 2023-24 state budget proposal the importance of supporting businesses during uncertain economic times, including prioritizing protecting the safety of retail workers, customers and neighborhoods from rising organized retail crime and retail theft,” the CRA said in a statement.

“We are proud to have worked with the Governor last year on his Public Safety Real Plan, which included funding for ORC task forces, increasing the number of task forces from three to five, including funding for ORC Special Prosecutors for each task force, and creating local law enforcement grants. for retail theft.

The California Republican Party, meanwhile, was outraged by the proposed budget, accusing Newsom of having looser spending in previous years and that spending has not helped solve or improve any of today’s major crises.

“Despite billions of dollars in spending in recent years, California still faces multiple crises, from homelessness to wildfires, inadequate water storage, outrageous cost of living, and school failures,” said California Republican Party Chair Jessica Millan Patterson. “Now with a huge budget deficit projected, it is time for Gavin Newsom to finally get serious about spending smarter to address the many issues that plague our state and repel longtime residents. Californians will be best served by this failed governor who is working with Republicans to find real solutions to our state’s biggest problems. Unfortunately, his concern for states like Texas and Florida seems more important to him than his concern for the state he was actually elected to.”

Environmental groups also denounced budget cuts and delays, accusing the governor of ignoring some of the state’s environmental needs.

“Things like the spread of electric vehicles in the state seem to be important until they suddenly don’t,” Ellen Fielder, an environmental lawyer, told the Globe Tuesday.

Senate and Assembly budget proposals will be submitted later this year, with the Governor’s budget review expected in May.

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