With Gov. Gavin Newsom and the Democratic-led Legislature coming to a budget agreement on Saturday, some winners and losers of the spending plan have become clear. As CalMatters Capitol reporter Alexei Koseff explains, many programs saw funding cuts, deferrals and delays to find $46.8 billion in fiscal solutions and balance the budget. The effort, according to the governor and legislative leaders, preserves California’s vast social safety net.
Some winners include:
Local homelessness efforts: The budget includes $1 billion for the sixth round of local homelessness funding. San Diego Mayor Todd Gloria said in a statement that the funding allows cities to “expand shelter capacity, grow street outreach teams, and build more temporary and permanent housing options.” Cities are also expected to receive $250 million over the next two years towards clearing homeless encampments.
Child care advocates: Hoping to create over 200,000 additional subsidized openings at child care facilities by 2028, the budget restores funding for 11,000 new slots. In a statement, Child Care Providers United praised the move: “Providers can’t pay the bills with the love we have for the children in our care.”
Middle-class scholarship recipients: Though a program that provides financial aid to low- and middle-class college students will have a planned reduction of $110 million a year starting in 2025-26, a one-time $289 million boost to a total of $926 million remains intact for 2024-25. Newsom in May proposed to slash it down to $100 million annually, a would-be blow to California’s plans to make college debt-free.
Public universities: The University of California and California State University will each receive about $100 million to $160 million in additional state base funding in 2024-25, with plans for a mix of funding cuts and deferrals the following two years that’ll be restored in 2027-28. The deal allows the systems to spend another year preparing for relatively leaner times.
And some losers:
Affordable housing advocates: In a blow to efforts helping to ease the state’s housing shortage, the budget plan includes cutting $1.1 billion from various affordable housing programs.
Health care workers: Not only will $746 million be cut from health care workforce development programs, but the budget delays even further a $25 hourly wage hike for health care workers. The pay raises were supposed to begin June 1, but now will be pushed back until at least October. Learn more about the wage hike in CalMatters’ FAQ.
Cal Grant recipients: A proposal to grow Cal Grant, the state’s key financial aid program, by $245 million has been scrapped. The expansion would have added 137,000 more students by fall 2024. A pared-down plan to expand it to 21,000 more students also didn’t make the final deal.
Climate change advocates: The plan guts $9 billion from the $54 billion spending package approved two years ago for key climate programs.
State of the State: Now that the budget agreement is done, Gov. Newsom will finally deliver his State of the State address on Tuesday. But it will be pre-recorded, not in person before the Legislature, and will be followed up by a letter, his press office announced Sunday.
Republicans have been blasting the governor for waiting so long to fulfill his constitutional duty, and Assembly GOP leader James Gallagher of Chico posted that Newsom is showing “disrespect” to the Legislature. This is the second year in a row Newsom has decided against the traditional speech.
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