2024-25 State Budget Proposal Protects Core Priorities and Ensures Fiscal Stability

Governor Newsom Outlines Key Pieces of Budget

Economic and Revenue Challenges Pose Significant Hurdles

This First Look report outlines key pieces of the 2024-25 California budget proposal and explores how the governor proposes to address significant economic and revenue challenges.

SACRAMENTO — Governor Gavin Newsom today signed legislation that reflects the early stages of the 2024-25 budget process. The budget proposal outlines the governor's priorities for the upcoming fiscal year, which include maintaining essential services, investing in education, and supporting economic recovery.

However, the state faces a projected $68 billion deficit, largely due to a decline in revenue in 2022-23. The Legislative Analyst's Office (LAO) estimates that the 2024-25 shortfall could reach $73 billion, putting additional pressure on the budget.

Despite the challenges, the budget proposal aims to protect core priorities and ensure fiscal stability. The governor has proposed increasing funding for education, healthcare, and public safety, while also investing in infrastructure and clean energy initiatives.

The budget proposal also includes measures to address the state's fiscal challenges, such as reducing spending and increasing revenue. The LAO recently released an update that projects the budget problem could grow by $15 billion, underscoring the need for continued fiscal discipline.

The budget proposal is now being reviewed by the California Legislature, which will have the opportunity to make changes before finalizing the budget in June 2024. The final budget will determine how the state's resources will be allocated over the next fiscal year.