Home>Articles>Gov. Newsom Unveils $297 Billion Budget Proposal With $22.5 Billion Deficit

California Governor Gavin Newsom (then Lieutenant Governor) riding in the Golden State Warriors Parade in Oakland, CA, Jun. 12, 2018. (Photo: Amir Aziz/Shutterstock)

Gov. Newsom Unveils $297 Billion Budget Proposal With $22.5 Billion Deficit

Budget proposal sees cuts to environmental programs, billions in delayed funding also seen across budget

By Evan Symon, January 10, 2023 3:41 pm

California Governor Gavin Newsom presented a $297 billion 2023-2024 budget plan on Tuesday, with a projected deficit of $22.5 billion.

In the last several years, California has seen large budget surpluses, with $38 billion reported in 2021-2022, and $97.5 billion being reported for the 2022-2023 budget year. However, with the post-COVID economy finally stabilizing, and the state losing both businesses and population in recent years, state revenues swung down as many had predicted, leading to a leaner budget.

In a statement on Tuesday, Newsom noted that funding would continue on as usual to core Californian services, as well as through education by continuing free lunch for all student programs and bringing in universal kindergarten. Homelessness funding, housing programs, Medi-Cal expansion, cutting drug costs, improving mental health programs, climate change programs, combatting drug use such as fentanyl, combatting crime, and supporting economic developments and small businesses were also mentioned in having continued funding.

“With our state and nation facing economic headwinds, this budget keeps the state on solid economic footing while continuing to invest in Californians – including transformative funding to deliver on universal preschool, expand health care access to all and protect our communities,” Governor Newsom said on Tuesday. “In partnership with the Legislature, we’ll continue to prioritize the issues that matter most to Californians while building a strong fiscal foundation for the state’s future.”

While most major programs did avoid large cuts in the proposal, there was an overall reduction in climate programs, despite Newsom saying otherwise. Some money was quickly shifted to flood programs following major floods and rainfall striking California since late December. $135.5 million was put toward urban flood risk reduction, with another $40.6 million going toward levees across the state. $25 million will also go toward reducing flood risk reduction in the Central Valley.

“What’s top of mind is flood investments,” added Newsom. “I’ll be off after this, down to the Central Coast.”

Drought was also a major factor on the budget, with an increase of $125 million going to a drought contingency fund and $31.5 million going to water rights. More funding also went to groundwater recharge projects and other water projects.

However, big cuts were also seen in the budget. $24 million was slashed to a water resilience project with a $270 million delay to the same project. Concurrently, a forever chemical cleanup project saw a major cut of $70 million. Other water projects, such as a water refilling project, was cut entirely, with water recycling and solar panel programs being cut severely.

Zero-emission vehicle programs also saw an 11% cut of $1.1 billion, with another $3.1 billion in funding for similar programs being delayed. Another $4.3 billion of the zero-emission program would also have a shift of funding to save it from being cut, moving from the general fund to a separate fund that polluting companies pay into.

Despite this, Newsom said on Tuesday that “We’re keeping our promises,” and that the state will still have $35.6 billion in reserves after the budget. At the press conference, Newsom also pledged not to touch the reserves and wanted to wait until May to make any final calls on the budget when the budget revision is due.

“We’re not touching the reserves because we have a wait and see approach to this budget,” continued Newsom. “We are in a very volatile moment. The budget will be revised in May when there’s more clarity.”

Mixed reaction to Newsom’s budget proposal

Democrats generally approved of the proposed budget on Tuesday, as no major cuts were recorded and that there is still enough room to make necessary adjustments to it.

Senator Nancy Skinner. (Photo: Kevin Sanders for California Globe)

“We funded things at such record levels, and a lot of the programs that we funded haven’t even gotten going yet, so we still have room to make some adjustments if needed,” noted Senator Nancy Skinner (D-Berkeley). “I’m very optimistic because we’re in good shape.”

Other groups, such as the California Retailers Association (CRA) also gave positive notes on the budget proposal, specifically noting that more funding was going towards retail theft enforcement and retail protections.

“CRA applauds Governor Gavin Newsom for recognizing in his 2023-2024 state budget proposal the importance of supporting business in uncertain economic times including the prioritization of protecting the safety of retail employees, customers and neighborhoods from growing organized retail crime and retail theft rings,” said the CRA in a statement.

“We were proud to work with the Governor last year on his Real Public Safety Plan, which included funding for the ORC Taskforces, increased the number of task forces from three to five, included funding for dedicated ORC prosecutors for each task force and established local law enforcement grants for retail theft.”

The California GOP, meanwhile, was up in arms over the proposed budget, charging Newsom with having more freewheeled spending in previous years, with the spending not solving or improving any of the major crises today.

“Despite billions of dollars in increased spending in recent years, California is still juggling multiple crises today, from homelessness to wildfires, inadequate water storage, an outrageous cost of living and failing schools,” explained California Republican Party Chairwoman Jessica Millan Patterson. “Now with a massive budget shortfall projected, it’s time for Gavin Newsom to finally get serious about smarter spending to resolve the many issues that are plaguing our state and driving long-time residents away. Californians would be best served by this failing governor working with Republicans to find real solutions to our state’s biggest problems. Unfortunately, worrying about states like Texas and Florida seems to be more important to him than worrying about the state he was actually elected to lead.”

Environmental groups also denounced the cuts and delays to the budget, charging the Governor with ignoring some environmental needs in the state.

“It seems things like expanding electric vehicles in the state are important until they suddenly aren’t,” Ellen Fielder, an environmental lawyer, told the Globe on Tuesday.

Senate and Assembly budget proposals will be submitted later this year, with a budget revision by the Governor expected in May.

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10 thoughts on “Gov. Newsom Unveils $297 Billion Budget Proposal With $22.5 Billion Deficit

  1. Newsom and Democrats making California a sanctuary state by providing taxpayer funds for illegals, abortions, criminals, transgenders, and unstainable zero emission goals while chasing out employers and productive taxpayers has finally home to bite them?

  2. Why is Jessica Millan Patterson just issuing feckless press releases instead of FILING LAWSUITS against the fiscal mismanagement and outright THEFT of our tax dollars???
    She is USELESS….

  3. “What’s top of mind is flood investments,” added Newsom. “I’ll be off after this, down to the Central Coast.”

    Honestly, the guy has A.D.D.
    We finally get a few heavy rainstorms and he now turns his attention to flood control! Which way will the wind blow tomorrow? In the summer when thousands of acres burn due to lack of fire prevention he will turn his attention and funding to fire prevention!
    This is now way to set a budget.
    He really is only qualified to lead lemmings off a cliff.

  4. The real budget deficit is much more than what Gavin Newsom wants to admit to? With an estimated a trillion dollars or more in unfunded pension liabilities for government employees, California never had a budget surplus as Gavin Newsom erroneously claimed.

  5. With huge state budget deficits, leave it to Democrat Senator Nancy Skinner from Berkeley (aka prune face) to proclaim “I’m very optimistic because we’re in good shape.” Nancy Skinner is a Berkeley graduate with a degree in education who has lived her entire adult life as a pampered leftist bureaucrat dependent on taxpayers. She has never run a business and she probably can’t even balance her checkbook. California is in the mess it is now because of ideological bankrupt Democrats like Nancy Skinner.

  6. Hey, fellow state employees, how so you spell major deficit?


    You know in your heart of hearts, he’s done it before and he’ll do it again. Just sayin’.

  7. $22.5 Billion deficit is almost equal to cost ($23 billion) of California illegal alien immigration services, easy fix if you follow the immigration laws of the United States? Here’s a fun one… ‘Lawsuit Against Getty Heirs Lays Bare How
    the Ultra Rich ‘Avoid Paying Taxes’: Financial Manager Claims She Was Fired When She Objected to ‘Dubious Scheme’ to Base Trust in Reno Office Park to Save $300 Million in California Taxes’ dailymail.co.uk

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