Golden State Today

Governor Gavin Newsom has unveiled a revised budget proposal for the fiscal years 2024-25, prioritizing balanced solutions to ensure a leaner and more efficient government. The proposal aims to close both this year's remaining $27.6 billion budget shortfall and next year's projected $28.4 billion deficit while preserving many key services that Californians rely on — including education, housing, health care, and food assistance.

The Governor's proposal ensures the budget is balanced over the next two fiscal years by tightening the state’s belt and stabilizing spending following the tumultuous COVID-19 pandemic, all while preserving key ongoing investments. This “budget year, plus one” proposal is designed to bring longer-term stability to state finances without delay and create an operating surplus in the 2025-26 budget year.

In anticipation of potential downturns, even during periods of booming revenues, the Newsom Administration had set aside $38 billion in reserves that could be utilized for shortfalls. This proactive measure has put California in a strong position to maintain fiscal stability.

“Even when revenues were booming, we were preparing for possible downturns by investing in reserves and paying down debts – that’s put us in a position to close budget gaps while protecting core services that Californians depend on. Without raising taxes on Californians, we’re delivering a balanced budget over two years that continues the progress we’ve fought so hard to achieve," said Governor Gavin Newsom.

The proposed budget also includes measures aimed at making government leaner such as cutting one-time spending by $19.1 billion and ongoing spending by $13.7 billion through 2025-26. This includes a nearly 8% cut to state operations and a targeted elimination of 10,000 unfilled state positions without proposing state worker furloughs or raising taxes on individuals.

Furthermore, Governor Newsom's revised balanced state budget maintains service levels for key housing, food, health care, and other assistance programs that Californians rely on while addressing the deficit by pausing the expansion of certain programs and decreasing numerous recent one-time and ongoing investments.

The Governor's revised balanced budget sets the state up for continued economic success. California’s economy remains the 5th largest economy in the world and for the first time in years, the state’s population is increasing and tourism spending recently experienced a record high. California is #1 in the nation for new business starts, #1 for access to venture capital funding, and the #1 state for manufacturing, high-tech, and agriculture.