Background
Although the CA State government honed a budget surplus of nearly $100 billion dollars six months ago, it is now facing a budget deficit of $22.5 billion because of spiraling inflation and a weakening stock market, which is problematic given that the budget relies heavily on capital gains from CA’s wealthiest residents. Therefore, to balance the budget (required by state law), the Newsom administration is proposing to delay previously funded expenditures and cut spending for infrastructure, safety net expansions, public health, arts education, housing, prisons, and workforce programs.
Delayed Expenditures
Newsom’s budget proposal would delay $7.4 billion in spending to future budget years and shift $4.3 in appropriations to other sources, such as construction project on CSU’s campuses that would now be paid for with state bonds. It would also eliminate $5.7 billion in previously funded expenditures, including $3 billion to address inflation and $750 million to pay down the unemployment insurance debt that was accrued during the COVID pandemic.
Spending cuts
Newsom’s budget proposal also proposes to make $3.9 billion in trigger cuts that could be reversed within the next fiscal year if the state has enough money to pay them off. These cuts primarily focus on climate transportation, where zero-emission vehicle credits and infrastructure programs are to receive $2.5 billion less from the general fund and rail and transit projects are to receive $2.2 billion less. Related to college and university infrastructure, Newsom would delay $1.15 billion in new affordable student housing money, while the planned $900 million for an interest-free loan program to build housing on college campuses would instead be funded in the 2025-2026 fiscal year. Furthermore, the $83 million dollar appropriation to upgrade the campuses of UC Merced and UC Riverside would also be delayed until 2024-2025.
Social Safety Net
Related to the social safety net, the proposal to expand food assistance to older undocumented immigrants would instead be funded in 2027, rather than later this year as initially proposed.
Public Health
Concurrent with public health, Newsom proposed a $1.2 cut to the California Department of Public Health. Most of the decrease comes from a $614 appropriation of COVID-19 emergency relief dollars that will instead be placed in the general fund. New public health workforce training programs would also receive a $50 million cut, leaving only $25.8 million to train microbiologists, epidemiologists, and public health nurses.
Arts Education
Concurrent with arts education, the governor has proposed to cut $1.2 billion of one-time discretionary funding for arts and instructional materials.
Housing
Newsom’s proposal would cut $350 million dollars from housing programs aimed at assisting first-time homebuyers and boosting affordable housing. Additionally, $200 million would be cut from a previously budgeted $500 million program named “Dream for All,” which is a fund that provides down payment loans to low and middle-income homebuyers.
Prisons
To save the state $150 million this budget cycle, Newsom’s proposal would close down individual wings within six state prisons.
Workforce Programs
Newsom also proposed to cut a planned $25 million investment in outreach to workers and employers in industries with high COVID risk and $40 million over the next two years for non-traditional apprenticeships.
To read the full summary of Newsom’s budget proposal, please click here.
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