On Wednesday, Gov. Gavin Newsom released his proposed 2024-2025 fiscal year budget. All eyes were focused on how the governor’s $291 billion spending plan addresses a $37.9 billion budget gap resulting from reduced tax revenues in the slumping economy. Newsom’s estimate is much smaller than the $68 billion deficit projection released by the independent Legislative Analyst’s Office (LAO) last month.
The governor proposes using $18.8 billion of California’s reserves to close the gap, more than half of the state’s “rainy day funds.” His plan also includes approximately 8.5 billion in reductions in spending and $7.2 billion in deferrals in funding for later years.
Despite the budget shortfall, Newsom proposes to continue to spend $200 million for the expansion of reproductive health, including abortion facilities. However, he suggests hundreds of millions in cuts to housing for young people aging out of foster care and some funding for family urgent response services.
From an economic standpoint, Newsom recommends hundreds of millions in cuts to job training, including healthcare, apprenticeships, transportation, EMT, and construction. He also reduces family stabilization funds through CalWORKS, which affects the neediest families facing homelessness.
On homelessness, critics argue that the proposal’s lack of continued funding for aggressive programs delays progress and forces counties and cities to rely on one-time grants that cut off progress once funding is no longer available.
According to a Public Policy Institute of California (PPIC) poll in December, six in ten Californians name economic conditions, homelessness, and housing as the three most important issues facing the people of California today. Partisans agree that economic conditions are the most critical state issue.
While the proposal continues to fund many of the commitments that Newsom has made in his tenure as Governor, including Medi-Cal spending for the undocumented, it has not allocated funds for humanitarian services for migrants released from border custody, leaving the burden to be absorbed by nonprofits like Catholic Charities.
The Catholic community, joining other faith and nonprofit leaders, has been attending to every migrant bus that has entered California – finding transportation when needed, legal and material resources, and even housing because none is available from counties or the state. With 38 buses in total and five buses arriving in the diocese of Los Angeles alone since Christmas, this is a crisis that nonprofits are being forced to solve without any state assistance.
The education budget maintains investments for improving support for public school students, including funding for community schools, universal school meals, expanded learning opportunities, education workforce, and continued implementation of universal transitional kindergarten. Proposition 98 funding for K-12 schools and community colleges is estimated to be $109.1 billion in 2024-25, and per-pupil funding totals $23,519 per pupil when accounting for all funding sources.
The budget proposal also maintains an investment of $2.1 billion for 146,000 new subsidized childcare slots for this school year.