Legislature Approves $297.9 Billion 2024-2025 State Budget

The California State Legislature approved the 2024-2025 budget plan on Wednesday night, giving the green light on California spending $297.9 billion beginning on July 1st.

For months, Governor Gavin Newsom, Assemblymembers, and Senators have been at odds over how much to spend on the upcoming 2024-2025 state budget. The deficit amount has widely ranged in recent months, with the Governor’s office giving the optimistic deficit amount of $46.8 billion over the next two years, while the Legislative Analyst’s Office (LAO) has given actual state deficit figures of $73 billion and, more recently in May, $55 billion. Not wanting to make many cuts, they went after the $46.8 billion amount.

While the budget was originally proposed to be for around $330 million, the deficit issue caused it to be slashed in January by Newsom to around $291 billion, with state budget reserves taking much of the weight with $13 billion and budget cuts only coming to $8.5 billion. Overall, over $30 billion of reductions were proposed. But in the 2024-2025 budget agreement this past weekend, only $16 billion in reductions made the cut. With other agreements in place, Newsom and Legislators finally agreed to a $297.9 billion budget. Only $211.5 billion of spending is to come from the general fund in 2024-2025, as compared to $225.9 billion in 2023-2024 and $234.6 billion in 2022-2023. Overall, compared to last year, the budget was also slashed, going from $310 billion in 2023-2024 to $297.9 billion for 2024-2025.

“In California, you don’t have to be profligate to be progressive,” said Governor Newsom during his State of the State address on Tuesday night. “We understand how to balance budgets while protecting working families, children and the most vulnerable people in this state.”

However, both the Legislature and the Governor still needed to both approve it themselves by the end of the month. With the deadline ticking, the Legislature approved the budget on Wednesday night at the Capitol building in Sacramento.

Democratic Leaders in the legislature praised the budget being approved, while also  noting that uneven revenue caused them to keep having to make hard decisions over the budget amount. Senate President pro tempore Mike McGuire (D-Healdsburg) said that “We held more than a hundred public hearings. No matter if you’re a Democrat or a Republican or no party preference, you’re going to benefit from this budget because it puts people first. This budget is responsible and it’s deserving of our support.”

Assemblyman Freddie Rodriguez (D-Pomona) also noted that “This budget isn’t what any of us wanted, but it’s responsible and protects our most vulnerable Californians. Ensuring we’re prepared – because we can’t predict the future – we’re leaving approximately half the rainy-day fund intact.”

This budget isn’t what any of us wanted, but it’s responsible & protects our most vulnerable…Moving forward, I’ll continue to fight to invest in the people of IE, & as Emergency Mgmt Cmte Chair, advocate for statewide emergency preparedness. @CalMatters, @CAgovernor #CALeg pic.twitter.com/IpdIz62UEQ

— Freddie Rodriguez (@AsmRodriguez53) June 27, 2024

Finally, Assemblyman David Alvarez (D-San Diego) said “California needs to have fiscal reform to prevent these wild swings in revenue that causes us to make really difficult decisions.”

However, GOP lawmakers were vehemently opposed to the new budget. Senator Roger Niello (R-Fair Oaks) explained early on Thursday that “This is the majority’s party budget. It ignores the priorities of 8 million residents of this state because none of my Republican colleagues were involved.”

Senator Brian Jones (R-Santee) previously said late on Wednesday that “Tonight, Democrat politicians passed a budget package that is not balanced, not sustainable, and not representative of the needs of everyday Californians. Rather than being responsible with California’s checkbook, Democrats chose to play shadow games with accounting. They shifted, swept, and shuffled money around, stealing it from disabled kids and taking money from a host of necessary services to fund unneeded social experiments and pet projects. It’s unfathomable. But it’s real.”

Tonight, Democrat politicians passed a budget package that is not balanced, not sustainable, and not representative of the needs of everyday Californians.

Rather than being responsible with California’s checkbook, Democrats chose to play shadow games with accounting.

They…

— Brian W. Jones (@SenBrianJones) June 27, 2024

Finally, in a press release on Thursday, Diane Dixon (R-Newport Beach) noted that “The last two weeks, the Legislature voted on more than 20 budget bills in an attempt to balance our State finances. While there were a handful of supportable “trailer” bills that were added after the June 15 budget deadline, the overall budget calls for spending a whopping $298 billion taxpayer dollars. The Governor and Legislative Leadership used gimmicks, delays and tricks to address their $46.8 billion deficit. 

“Unfortunately, this is not the last year the Democrat supermajority will face a spending and deficit crisis. The reality is: Californians and business owners are leaving the State to less regulated, more tax-friendly states around the country. These departed tax dollars will only increase the gap in our general fund. To truly address our fiscal strains, we need structural change to solve the affordability crisis and reduce regulations for small businesses to encourage Californians to stay. Otherwise, I anticipate next year to be “deja vu all over again” with just as painful of a budget process.”

Despite the concerns of GOP Senators and Assemblymembers, the 2024-2025 state budget was ultimately approved.

“Everyone knew it was going to be passed, but depending on the party, you either saw people glad that it was passed or looking glum yesterday,” said “Dana”, a staffer at the Capitol building, to the Globe on Thursday. “People here are really counting on California not having a big emergency in the next few years with the budget the way it is.”

Governor Gavin Newsom is expected to sign off on the Budget by the June 30th deadline.