SACRAMENTO – Governor Gavin Newsom, Senate President pro Tempore Mike McGuire and Speaker of the Assembly Robert Rivas announced an agreement on $17 billion in early actions to significantly reduce the existing shortfall and best position California to responsibly address the budget in June.
The package includes solutions that would enable final budget negotiations to focus on closing the gap and protecting core programs, and agrees to aim for using approximately half of the reserves this year.
It contains a mix of $3.6 billion in reductions (primarily to one-time funding), $5.2 billion in revenue and borrowing, $5.2 billion in delays and deferrals, and $3.4 billion in shifts of costs from the general fund to other state funds.
The package will be included in a budget bill that will be going into print in the coming days, and the package will be vetted by the legislative budget committees early next week. A budget bill could be taken up for votes in the Assembly and Senate as soon as Thursday, April 11.
“I thank our legislative leaders for their partnership in taking this major step to address the shortfall with a balanced approach that meets the needs of Californians and maintains a strong fiscal foundation for the state’s future,” said Governor Gavin Newsom. “We are able to meet this challenge thanks to our responsible fiscal stewardship over the past years, including record budget reserves of close to $38 billion. There is still work to do as we finalize the budget and I look forward to the work ahead together to continue building the California of the future.”
“We are all committed to delivering an on-time balanced budget and this early action agreement is a critical first step to shrink the state’s shortfall. The Senate will be taking budget votes next week to get this deal across the finish line, and I’m grateful to the Governor, Speaker, and the entire Senate Budget Committee for their partnership,” said Senate President pro Tempore Mike McGuire (D-North Coast). “Next up: The Senate will be developing our final action budget plan, which we’ll release later this Spring. It will be our roadmap to tackle the remaining budget deficit and adopting an overall state budget.”
“I’m proud of our Assembly Democratic Caucus for their commitment to a transparent, deliberative budget process. It’s the right way to come at closing such a massive shortfall, along with freezing some undisbursed, one-time spending to preserve more options in June,” said Speaker of the Assembly Robert Rivas. “We expect the Governor to deliver challenging budget proposals next month to reduce the deficit in the long-term, and we’ll consider them carefully. Together, we can deliver real solutions for hard-working Californians.”
Read an overview of the early action package here.
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