Some Highlights from the California Budget Deal

Governor Gavin Newsom and state lawmakers reached a deal this week on the 2023-2024 budget. The $310.8-billion spending plan will cover the state’s $32-billion deficit while still setting aside a record $37.8 billion in reserves.

Public transit is one of the big winners in this deal. Newsom originally proposed to slash public transportation funding by $2 billion, but the final spending plan sets aside $5.1 billion over the next four years.

Representatives for Bay Area Rapid Transit and the San Francisco Municipal Transportation Agency expressed gratitude for the lifeline. Public transit systems are still reeling from the pandemic and have been bracing for a “fiscal cliff.”

Among the biggest losers are proponents of the Delta tunnel project, which would pump water from the Sacramento River to other parts of the state. To the dismay of local water districts, Newsom’s proposal to fast-track the project was taken out of the final budget.

The tunnel project had threatened to derail negotiations. Last week, a group of lawmakers sent a letter to the governor explaining their firm opposition to the project. The letter cited negative health and environmental impacts for Sacramento, San Joaquin and Contra Costa counties.

The budget includes a series of items to address the winter storms that devastated parts of California. The towns of Planada and Pajaro in Monterey and Merced counties will each get $20 million to help their residents recover.

Rural counties struggling with the threat of hospital closures can also breathe a sigh of relief. The budget deal includes $150 million for the distressed hospital loan program, bringing total available funds to $300 million.

A special carve-out for the City of Fresno remains in the final bill. The city is getting $250 million to update its downtown area. Click here to read the details of how this came to pass. 

Finally, the agreement provides $1 billion for local governments to address homelessness via the state’s Homeless Housing, Assistance and Prevention grant program. That’s a third of what the League of California Cities was seeking, and it’s not the permanent funding stream that local governments say they need.

“California is one of the largest economies in the world, yet home to the highest rate of homelessness in the country. So, it defies logic that the budget once again fails to include ongoing funding to match the scale of this emergency,” said Cal Cities Executive Director Carolyn Coleman

The California State Association of Counties offered a similar response.

“All levels of government simply cannot address this complex issue without ongoing funding to plan and support an effective system,” the CSAC stated. “No state, county or city model on any issue of priority to all Californians is successful without the state first developing a comprehensive system with clearly defined roles and responsibilities and funding it appropriately.”

The failure to provide ongoing homelessness funding makes California cities one of the biggest losers in this budget plan, as the Sacramento Bee’s editorial board explained. 

“Addressing the many facets of homelessness — shelter, transitional housing, permanent housing, mental health care and drug rehabilitation — has the same established need for funding as education, prisons or parks,” the editorial board wrote. “Yet homelessness has no similarly established home in the state budget. It has to fight for the leftovers. Big city mayors end up fending for themselves and heading home with far less than they need.”

Read more highlights from the California budget at CalMatters