January 16, 2024

Governor Newsom’s Budget Proposal. Governor Newsom released his 2024-25 budget proposal on January 10, 2024, as the State Constitution requires. The Governor’s draft plan is filled with doom and gloom. Still, even the Governor thinks the budget deficit is about $30 billion smaller than last month’s $68 billion shortfall forecast by the Legislative Analyst’s Office.

What the Governor presented is just a proposed budget, and past doom-and-gloom predictions turned into some of the highest budget surpluses in State history. A lot can and will likely change before May. Throughout the next few months, the draft budget must go through the California State Legislature for review and likely revisions. After the May Revise, our California State legislators will vote on the budget before presenting it to the Governor for his approval and signature by June 30, 2024. Learn more about the California State budget process here.

As the year progresses, your participation in CAPS Actions will help determine how his budget predictions apply to you and your colleagues. 

Here’s a summary of relevant parts of the Governor’s budget proposal:

  • The plan envisions $291.5 billion in spending for the 2024-25 fiscal year that starts July 1, 2024. Approximately $208.7 billion is General Fund spending, $80.8 billion comes from special funds, and $2 billion from bond funds.
  • Employee Compensation: The Budget includes $1.3 billion ($676.3 million General Fund) for scheduled increases for employee compensation that have already been bargained for, health care costs, and retiree health care prefunding contributions for active employees. The $1.3 billion also covers projected increases in health care and dental premiums and enrollment in calendar 2025. This number does not include any allocation for increases to salaries and benefits that have yet to be determined. 
  • The Deficit: The Budget must address an estimated $37.9 billion shortfall, although that number will likely change as the state collects more revenues and refines its forecast in the coming months.
  • Immediate Reductions in State Spending: Last month, The Department of Finance (DOF) told state entities to immediately reduce spending on everything from office supplies to business trips.
  • Telework Stipends: Meanwhile, Newsom proposed to eliminate the three-year-old telework stipend program. Assuming the stipends end with the start of the 2024-25 fiscal year on July 1, the government will only save an estimated $51.2 million over 12 months  – roughly .0176% of the overall budget. This change requires the State to bargain with the unions currently in a contract, so it is not a foregone conclusion. We will fight to keep our telework stipends.
  • Vacant Positions: The DOF will work with departments and agencies to reduce vacant positions on the books. Newsom says the reduced appropriations will be restored in the future.

Payroll Deferral: Newsom proposed deferring state payroll costs from June 30, 2025, to the next day, July 1, 2025. By pushing the expense to the first day of the next fiscal year, the state can appropriate funds for just 11 months of pay instead of 12 months in fiscal 2024-25, a $3.2 billion savings ($1.6 billion General Fund). Employees will not notice a change from this.

Click here to view the Governor’s 2024-25 Budget Summary. This link will open detailed budgets by agency and department.

Let’s take control of our future and remember that the equity we are demanding is pennies when you consider the entirety of the California State Budget.

Throughout this entire process, it is CRITICAL that you and your coworkers are staying engaged and connected. 

Sign up for our public email and text updates here. This ensures that we can reach you effectively in case we need to take communications off work servers. 

Please consider supporting and sharing the following with your networks: CAPS GiveButter Strike Hardship Fund (donations are not tax-deductible), the CAPS Support Letter, and a list of other ways to support State Scientists’ fight for a fair contract.

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