Gov. Gavin Newsom (D-CA) announced on Friday his revised $288 billion budget for 2024-2025 that calls for spending cuts in 260 different state programs, slashing over 10,000 vacant jobs, and ending some business tax deductions.
In January, Newsom estimated that California’s budget deficit was $37.9 billion, and in April, he made $17.3 billion in cuts to help close the gap. However, the estimated shortfall turned out to be $7 billion more than Newsom anticipated, leaving the governor to figure out how to tackle a $27.6 million deficit.
“These are things we worked closely with the Legislature to advance,” Newsom said of the cuts. “None of this is the kind of work you enjoy doing, but you’ve got to do it. We have to be responsible. We have to be accountable.” Many of the programs are those Newsom himself has supported.
Newsom’s proposal included $15.2 billion in cuts, $4.2 billion use of reserves, $14.8 billion from pausing program expansions, and $7.5 billion from borrowing nontax revenues, which will produce a $3.4 billion budget surplus.
These budget cuts include $500 million earmarked for improving water storage, $272 million for employment services for the state’s welfare program, $550 million from facility grants for building more spaces, which will host a new grade between preschool and kindergarten, and $1.4 billion limiting the state childcare expansion. A program providing scholarships to middle-class students pursuing teaching will be cut by $510 million.
In addition, Newsom will save $80.6 million by closing 46 housing units at 13 state prisons. The move comes as the state’s prison population has dropped by nearly 25% since 2019, and the state is also in the process of closing its third prison.
Newsom’s proposal was also focused on fixing future budget shortfalls, including an estimated deficit of $28.4 billion in 2025-2026.
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“It’s, I think, appropriate and prudent for us not to just solve for this year but to also solve for next year,” Newsom said. “We know what we know, but we don’t know what we don’t know. … This is why I believe we need to have a two-year mindset going forward.”
Legislators have until June 15 to approve a budget for the next fiscal year.
