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Budget News

What We Are Reading…

2024-25 Budget Window: FY 2022/2023 – FY 2024/2025


California Slashes State Tax Revenue Outlook Ahead of Bond Sales
Bloomberg: Maxwell Adler & Eliyahu Kamisher

  • As of Oct. 25, a total of only about $18B collected out of the $42B in collections expected for the entire month
  • “The new assessment of tax revenues reveals that cash receipts for FY 2022-23 will likely be significantly below the $198B the state forecasted in May 2023 for its top three tax revenue sources – personal income taxes, corporate and sales taxes.”

Casts doubt on recovery of $24B by the new November 16th state income tax deadline


Updated “Big Three” Revenue Outlook
LAO: Brian Uhler, Chas Alamo, Seth Kerstein

  • State's economy entered downturn in 2022
    • Home sales down by ½
    • Number of CA companies that went public down more than 80% from 2021
    • Unemployment increased from 3.8% to 4.8%
    • Income tax from paychecks down 2% over last 12 months
    • Sales tax flat even with inflation on prices of goods being taxed
  • 22/23 revenue $26B below estimates
    • Total income tax collections down 25% in 22/23: “[t]his decline is similar to those seen during the Great Recession & dot-com bust”

Updated revenue outlook anticipates collections to come in $58B below Budget Act projections across 22/23-24/25


The 2024-25 Budget: California's Fiscal Outlook

LAO: Gabriel Petek

  • State's economy entered downturn in 2022
    • Home sales down by ½
    • Number of CA companies that went public down more than 80% from 2021
    • Unemployment increased from 3.8% to 4.8%
    • Income tax from paychecks down 2% over last 12 months
    • Sales tax flat even with inflation on prices of goods being taxed
  • 22/23 revenue $26B below estimates
    • Total income tax collections down 25% in 22/23: “[t]his decline is similar to those seen during the Great Recession & dot-com bust”
  • Decline in General Fund revenue reduces minimum required spending under Proposition 98 by $21B from 22/23-24/25
    • 22/23: $9.6B
    • 23/24: $7.0B
    • 24/25: $4.4B
    • “The magnitude of the downward revision in 22/23 is unprecedented for a fiscal year that is already over.”
    • Proposition 98 reserve current balance: $8.1B
  • Legislature will need to solve $68B budget problem
    • Reserve current balance: $24B
  • 24/25 COLA estimated to be 1.27%


Budget Letter 23-27

  • “The State of California anticipates significant General Fund budget deficits in fiscal years 2023-24 and 2024-25.”
  • “Directs all entities under the Governor's direct executive authority to take immediate action to reduce current-year General Fund expenditures.”


Finance Bulletin: December 2023 Release


  • Combined October & November State General Fund cash revenue fell 39.9% short of 2023 Budget Act forecasts.
  • Dismal personal income tax and corporate tax receipts in October & November significantly contributed to an overall 24.6% year-to-date shortfall in general fund revenues with only $74.748B materializing out of the $99.072B expected.


Governor's Budget Summary: 2024-25
Gavin Newsom, Governor – State of California

  • Proposes total State budget of $291.49B with general fund expenditures of $208.718B
  • Estimates $37.9B budget shortfall as a consequence of stock market declines that decreased revenues in 2022 and unprecedented delay in income tax collections
  • Personal income and corporate tax receipts through November were $25.7B (22%) lower than projected in 2023 Budget Act
  • Proposes closing $37.9B budget shortfall with a combination of approaches:
    • Reserve Fund Withdrawals: $13.1B
    • Reductions: $8.5B
    • Revenue/Internal Borrowing: $5.7B
    • Delays: $5.1B
    • Fund Shifts: $3.4B
    • Deferrals: $2.1B
  • Proposes CCC Budget Adjustments
    • 76% COLA on SCFF, select categorical programs, and Adult Education Program
    • 5% enrollment growth
    • One-time reserve fund withdrawals of approximately $235.9M in 2023-24 and $486.2M in 2024-25 to support SCFF
    • $60M in one-time funds to support expansion in nursing


Joint Analysis: Governor's January Budget

California Community Colleges, ACBO, ACCCA, & Community College League of California

  • Relative to 2023-24 Enacted Budget, Governor's Proposed 2024-25 Budget decreases Total CCC Budget to $13.2B from $13.5B with State general fund support also declining to $8.2B from $8.7B
  • Governor's Budget proposal for California Community Colleges appropriations and categorical programs rely on withdrawal of one-time Proposition 98 Rainy Day funds
  • Only select categorical programs receive 0.76% COLA in Governor's proposal: EOPS; DSPS; Apprenticeship; CalWORKS; Mandates Block Grant; CARE; & Childcare tax bailout


The 2024-25 Budget: Overview of the Governor's Budget

LAO: Gabriel Petek

  • In December, LAO estimated $68B budget problem. Governor's Administration estimates the state faces a budget problem of $38B in their budget proposal.
    • LAO estimates Administration solved a larger budget problem of $58B yielding a net difference of about $10B between LAO and Administration budget deficit estimates.
    • “The key difference here is related to our offices' respective revenue forecasts – the Governor's are about $15 billion higher.”
    • LAO believes current evidence suggests the Administration will likely have to revise their revenue estimates downward and propose additional budget solutions in their May revise.
  • “Compared with the estimates included in the June 2023 budget plan, the administration estimates the constitutional minimum funding level for schools and community colleges is down $14.3 billion over the 2022-23 through 2024-25 period.”
    • “This downward revision consists of a $15.2 billion reduction in required General Fund spending, partially offset by a $903 million increase in local property tax revenue.”
    • “Most of the reduction -- $9.1 billion – is attributable to 2022-23, with the remainder divided about evenly between 2023-24 and 2024-25.”
  • “The budget proposes to reduce General Fund spending on school and community college programs in 2022-23 by $8 billion.”
    • The Governor's Proposed Budget does not indicate how this $8 billion reduction will be accomplished.


UC Berkeley IGS Poll

Mark DiCamillo

  • 50% of the state's registered voters describe CA budget deficit as extremely serious, while another 37% consider it somewhat serious.
  • 51% support spending cuts to government services.
  • 35% support tapping into state's rainy-day fund.
  • Borrowing from special funds and raising taxes are supported by only 17% and 13%, respectively.


Recent Revenue Coming in Below Governor's Budget Projections

LAO: Chas Alamo & Brian Uhler

  • 2024-25 Governor's Budget projects personal income tax revenue will grow 12% this year
  • Income tax withholding is running only 2% higher
  • January 15th estimated tax payments are approximately $3B short of Governor's Budget Projections
  • January daily income tax withholding is running about $800M below Governor's Budget monthly projections


Newsom's $8 Billion Fix to Spare Cuts to Schools, Community Colleges May Face Tough Sell

EdSource: John Fensterwald

  • Governor's Budget proposes diverting $5.7B from Proposition 98 rainy day fund to address 2023-24 deficit as well as sustain a flat budget with a small COLA for 2024-25.
  • Revenue shortfalls for 2022-23, discovered after the much-delayed tax deadline to November elapsed, have significantly reduced Proposition 98 funding for that fiscal year even though schools have already spent funding from that year.
  • Newsom's strategy for addressing the 2022-23 shortfall is a mystery with his budget summary referencing it in only one-sentence promising to address $8B of the shortfall through statutory changes.
  • LAO & School Services report “it's their understanding from Department of Finance that the payments from the general fund to cover the [2022-23] Proposition 98 overpayment would be made over five years, starting in 2025-26”.
  • LAO's principal fiscal and policy analyst for TK-12 education, Ken Kapphahn, is quoted as expressing concerns about the State's use of future revenue to fund a current shortfall.
  • Both Newsom's administration & LAO are projecting general fund deficits averaging about $30B/year in the three years after 2024-25 even in absence of a recession. “Pushing the $8 billion solution for the 2022-23 Proposition 98 deficit, along with other general fund delays and deferrals into those years will compound difficult choices according to the LAO.”
  • LAO recommends resolving 2022-23 deficit by withdrawing additional funds from Proposition 98 reserve fund and reducing unallocated one-time funding, such as those funds for community schools and electric school buses


The 2024-25 Budget: Overview of the Governor's Budget


  • LAO presentation to Assembly Committee on Budget


The 2024-25 Budget: Higher Education Overview

LAO: Gabriel Petek

  • LAO is critical of Governor's proposal to “increase CCC costs even though available Proposition 98 funding is not sufficient to cover even existing CCC costs.”
  • LAO pans growing CCC apportionment shortfalls as a poor practice noting “[u]nder the Governor's budget, this shortfall grows, reaching $486 million in 2024-25” and “5.1 percent of ongoing apportionment costs would be covered with one-time funds”.
  • Governor's plan “makes managing CCC budget in 2025-26 even more difficult, with higher spending, lower reserves, and more disruptive choices remaining.”
  • “If the Governor had aligned the COLA for Proposition 98 programs with available Proposition 98 funding last year, the Proposition 98 budget in 2024-25 would be in balance without requiring reserve withdraws.”
  • LAO recommends pulling back one-time funding from prior budgets and holding CCC funding flat for 2024-25.


Income Tax Withholding Tracker

LAO: Chas Alamo

  • January personal income tax withholding short of Governor's Budget projections by $1B (11%)


Updated “Big Three” Revenue Outlook

LAO: Brian Uhler; Chas Alamo; Seth Kerstein

  • LAO state revenue about $24B below Governor's Budget across fiscal years 2022-23 to 2024-25
  • Revenue downgrade consistent with weak cash collections in December and January
  • Corporate tax collections down by over 1/3 in December relative to year before; both income tax withholding and estimated payments have also been down recently


The 2024-25 Budget: The Governor's Proposition 98 Funding Maneuver

LAO: Gabriel Petek

  • General Fund payments to schools & colleges for 2022-23 exceed revised Proposition 98 minimum guarantee by approximately $8B
  • Governor proposes no changes to the funds already distributed for 2022-23 on a cash basis; rather, he proposes to delay recognition of these payments over several fiscal years beginning in 2025-26
  • The payments would be scored outside of the state's Proposition 98 requirements; thus, adding to the State's projected deficits in the impacted outyears
  • This plan would create a binding obligation that magnifies an already problematic structural deficit (the state currently faces deficits of approximately $30B per year over the next few years) and would likely require more cuts to other programs in the future
  • LAO strongly recommends the legislature reject the Governor's proposal


Finance Bulletin: December 2023 Release


  • CA unemployment rate rose to 5.1% in December 2023 & labor participation decreased to 62%
  • Five sectors lost jobs: professional & business services; trade, transportation, & utilities; information; financial activities; and mining and logging.
  • Preliminary General Fund cash receipts were 19.7% below 2024-25 Governor's Budget forecast for January primarily driven by a $4B shortfall in personal income tax estimated payments and $1B shortfall in personal income tax withholding receipts
  • Corporate and sales tax receipts are also trending below budget forecast estimates


The 2024-25 Budget: Deficit Update


  • Recent revenue shortfalls increase LAO's projection of Governor's budget by an additional $15B
  • LAO identifies $16B in recent one-time and temporary spending that could be reverted or reduced to help mitigate the additional budget deficit impact


The 2024-25 Budget: California Community Colleges

LAO: Gabriel Petek

  • $9.1B drop in Proposition 98 Guarantee attributable to 2022-23
  • Governor proposes reclassifying $8B of 2022-23 General Fund spending and moving recognition in equal increments spread across fiscal years 2025-26 through 2029-30
  • Under the Governor's budget proposal, the minimum guarantee is revised downward by $2.7B and baseline budget increases for 2023-24 are addressed through a $3B withdraw from the Proposition 98 Reserve
  • LAO is critical of Governor's 2024-25 budget plan for California Community Colleges noting “despite not having sufficient Proposition 98 funds to cover existing Proposition 98 program costs, the Governor's budget contains some Proposition 98 program augmentations in 2024-25”
  • Governor proposes making another withdrawal from the Proposition 98 Reserve to cover 2024-25 budget plans
  • LAO criticizes Governor's reliance solely on his 2022-23 budget maneuver and withdrawals from Proposition 98 reserves to address shortfalls
  • LAO recommends: use of Proposition 98 reserve instead of funding maneuvers to address 2022-23 drop in minimum guarantee; identify more budget solutions to address current year drop in minimum guarantee, such as lowering California Community College spending and sweeping 2022-23 growth funds; hold core spending flat for 2024-25; and consider ways to achieve ongoing General Fund savings
  • LAO recommends the legislature reject the Governor's proposed one-time funding for nursing program expansion


Legislative Analyst Update Projects Bigger Funding Drop for Schools, Community Colleges

EdSource: John Fensterwald

  • Outlines Proposition 98 funding change from 2022-23 to 2024-25
    • 2022-23
      • $110.4B enacted by Legislature in 06/2022
      • $107.4B readjusted by Legislature in 06/2023
      • $98.3B based upon revised revenue as of 01/2024
    • 2023-24
      • $108.3B enacted by Legislature in 06/2023
      • $105.6B based upon revised revenue as of 01/2024
    • 2024-25
      • $109.1B proposed funding as of 01/2024
  • Reports on Governor's proposed budget maneuver for addressing 2022-23 Proposition 98 shortfall and LAO's objection to that plan.


Updated “Big Three” Revenue Outlook

LAO: Brian Uhler; Chas Alamo; Seth Kerstein

  • LAO forecast unchanged from last month – continues to suggest downside risk.


Protect Our Progress 2024 – Step One: Shrink the Shortfall

California State Senate Early Action Plan: Senator Mike McGuire; Senator Scott D. Wiener

  • Senate plan to immediately decrease the budget shortfall to a more manageable level.
  • Plan uses current point-in-time shortfall estimates ranging from $38B to $53B.
    • These estimates assume Proposition 98 funding levels are at the constitutional minimum in both 2022-23 and 2023-24 fiscal years; otherwise, the shortfall figures grow by approximately $15B.
  • Proposes early action to implement $17.1B in budget solutions.
  • While the plan supports deferrals to both CSU and UC, it does not propose early action on CCC.


Statement on Early Action Budget Proposal

Governor Gavin Newsom

  • Governor Newsom expresses appreciation for Senate's plan and states “I look forward to seeing this proposal move forward quickly.”


Finance Bulletin


  • CA's unemployment rate rose to 5.2% in January 2024.
  • Statewide median sale price of existing single-family homes decreased to $788,940 in January 2024.
  • 2023-24 year to date general fund revenues 4.3% below forecast largely attributable to shortfalls in personal income and corporate taxes.


Newsom Called It a 'gimmick.' Now He's Using The trick to Lower California's Massive Deficit

LA Times: Taryn Luna

  • Discusses Governor's plan to delay state worker payroll to shift expense from one fiscal year to the next.


Governor Newsom Signs Budget Bill to Slash Shortfall

Governor's Office Press Release

  • Governor signed AB 106, an early action budget bill, implementing measures to reduce the budget shortfall by approximately $17.3B.
  • None of the early action plan items pertain to Proposition 98 funding.


Finance Bulletin


  • U.S. headline inflation increased to 3.5% year-over-year in March 2024.
  • CA headline inflation decreased to 3.3% year-over-year in February 2024.
  • CA's unemployment rate at 5.3% in March 2024.
  • General Fund agency cash receipts were $5.8B/4% below the Governor's 2024-25 Budget forecast.


Budget Letter 24-07


  • Provides direction to suspend current year spending authority above and beyond those reductions identified in Budget Letter 23-27 issued on December 12, 2023.
  • Departments receiving one-time appropriations with multi-year expenditure authority subject to specified criteria ordered to immediately cease spending or encumbering these resources.


Governor's May Revision: 2024-25

Gavin Newsom, Governor – State of California

  • May Revise forecast projects steady, but slowing economic growth from mid-2024 into early 2025. Credit projected to ease starting in mid-2024 with loosening monetary policy leading to economic growth at a steady-state rate between 1.5% to 1.9% in mid-2025 through the end of the forecast window in 2027. Inflation is projected to slow to historic rates of between 2%-3% by early 2025. CA unemployment is projected to remain at 5.3% through the first half of 2025.
  • Risks to economic forecast:
    • Persistently elevated inflation
    • Interest rates remain high
    • Geopolitical conflicts, such as escalating tensions between China & Taiwan
  • Compared to January's revenue forecast, May Revise forecast projects Big Three revenues will be $10.5B lower through fiscal year 2024-25.
  • Budget shortfall revised to $44.9B, up $7B since January.
  • Early action budget package included $17.3B of solutions leaving a $27.6B budget problem remaining.
  • May Revise maintains January proposal to withdraw $12.2B from Budget Stabilization Account (BSA) and $900M from Safety Net Reserve; however, spreads the use of the BSA over fiscal years 2024-25 ($3.3B) and 2025-26 ($8.9B) to assist with balancing the budget through fiscal year 2025-26.
  • May Revise includes withdraws of $8.4B from the Public School System Stabilization Account to “maintain predictable support for local educational agencies and community college districts.”
  • Incorporating $1.2B to account for erosions in budget solutions proposed in January, May Revise addresses the budget problem through the following means:
    • Reserves: $4.2B
    • Reductions: $19.2B
    • Revenue/Borrowing: $7.7B
    • Delays: $5.6B
    • Shifts: $7.3B
    • Deferrals: $2.1B
  • Cal Grant Reform & California Community College Cal Grant Expansion Program in 2022 Budget Act trigger language for incorporation in 2024 Budget Act if funds were available are not included in the May Revision.
  • Learning Aligned Employment Program reduced $485M one-time from balance of unspent program resources.
  • May Revise proposes additional legislation that would require the state to set aside a portion of anticipated surplus funds to be allocated in a subsequent budget act.


Joint Analysis: Governor's 2024-25 May Revision

California Community Colleges, ACBO, ACCCA, & Community College League of California

  • 07% COLA for community college apportionments and certain categorical programs.
  • $28M for 0.5% systemwide enrollment growth.
  • Retains $60M one-time for nursing program capacity expansion.
  • Adds $35M for Vision 2030 projects.
  • Early Action Plan (AB 106) passed in April amending the Budget Act of 2023, but no changes to CCC funding were included in the plan. However, the bill's language authorizes the Administration to freeze additional one-time funding from the 2021, 2022, or 2023 Budget Acts.
  • May Revision continues to borrow nearly $9B from future non-Proposition 98 sources which has drawn criticism from both the LAO and various K-14 stakeholder groups. Should the concept of borrowing from non-Proposition 98 sources be rejected by the Legislature, it could lead to programmatic reductions and/or deferrals.
  • 2024-25 California Community College Proposition 98 estimate of $12.6B reflects the continued reliance on a budget maneuver that postpones recognition of overpayments to districts for 2022-23 that ended up exceeding revised Proposition estimates for that year by $8.8B (pushing the cost for that overpayment to the future).
  • The Governor's Budget proposed withdrawals of about $236M for 2023-24 and $486M for 2024-25 to support SCFF. May Revision increases proposed withdrawals to $532.5M for 2023-24 and $381.5M for 2024-25. The proposal would eliminate the balance in the Public School System Stabilization Account at the end of 2024-25.
  • May Revision applies an administrative reduction of 7.95% to all state agencies compared to the levels proposed in the Governor's Budget.


The 2024-25 Budget: Initial Comments on the Governor's May Revision

LAO: Gabriel Petek

  • Estimates Governor addressed a $55B budget problem primarily by adjusting spending.
    • $22B of spending-related solutions are related to school and community college funding changes.
  • Governor proposes new statutory language to set aside anticipated surplus revenues for at least a year.
  • Budget problem has shrunk since January due to Early Action (AB 106).
  • Funding for schools and community colleges down $3.7B over budget window. Most of this decline is attributable to 2023-24 and consists of a $4.2B reduction in required General Fund spending partially offset by a $489M increase in local property tax revenue. May Revision includes several actions to mitigate the effects of lower Proposition 98 spending on schools:
    • Reserve withdraws
    • Cost shifts
    • Repurposing unspent/unused funds
  • May Revision proposes withdrawing the entire balance in the Proposition 98 reserve.
  • Administration's 2022-23 projected spending level for schools and community colleges was $8B higher than required minimum funding level. Govenor's budget proposed “accruing” these $8B in prior-year payments to future years gradually over a 5 year period beginning in 2025-26 without changing the amount disbursed to schools and community colleges. The May Revision retains this maneuver and accrues an additional $768M to future years reflecting a further decline in the minimum funding level for 2022-23.
  • May Revision provides funding to cover a higher 1.07% COLA (up from 0.76% in January proposal).
  • LAO declares Governor's May Revision “puts state on better fiscal footing” in a number of ways:
    • Reduced reliance on reserves
    • Further reduces one-time and temporary funding
    • Introduces proposal to save excess revenues
    • Improves likelihood State can maintain core services
  • LAO thinks is it more likely than not that revenues ultimately will come in below the May Revision estimates; however, think the administration's estimates are a reasonable basis for building the state budget.


Teachers, School Boards Threaten to Sue Over Gov. Newsom's Fix for Revenue Shortfall

EdSource: John Fenterwald

  • California School Boards Association (CSBA) & California Teachers Association (CTA) separately announced threats to sue over Gov. Newsom's end run around Proposition 98 that would deny schools and community colleges billions of dollars.
  • School & community colleges are facing a massive revenue shortage – a drop of $17.7B in Proposition 98 funding over a three-year period, including $3.7B since January alone.
  • CSBA & CTA argue that the extra $8.8B the administration allocated over 2022-23 Proposition 98 minimum guarantee becomes the floor for calculating the 2023-24 obligation, and that it is not a mistake or overpayment.


The 2024-25 Budget: Multiyear Budget Outlook


  • Under LAO revenue estimates and assuming Governor's May Revision policies are adopted, modest operating deficits persist through the multiyear period ranging from a very small deficit in 2025-26 to larger ones in the out-years.
  • May Revision makes substantial progress toward structural balance by shrinking the state's projected deficits from around $30B (LAO's December 2023 estimate) to an average of less than $10B.
  • LAO recommends Legislature maintain a similar overall structure to the Govenor's approach in the final budget package.


Gov. Newsom, School Groups Settle Funding Fight, With Some More Money Coming As IOUs

EdSource: John Fensterwald

  • Winter storms in early 2023 caused tax filing deadlines to be extended by 6 months and stymied the State's revenue projection efforts resulting in $8.8B more than the Proposition 98 minimum being appropriated for FY 2022-23.
  • In Governor's Newsom's January Proposed Budget, he reduced FY 2022-23 Proposition 98 funding from $106.3B to $97.5B creating an $8.8B overpayment to schools that he shifts to a non-Proposition 98, general fund obligation recognized in $1.8B increments over five years beginning in FY 2025-26. This plan spared schools and colleges from having to repay the $8.8B already distributed to and spent by those entities but lowers the base Proposition 98 amount upon which future Proposition 98 funding calculations may rely.
  • Newsom's plan to spare schools and colleges immediate cuts while scaling back Proposition 98 growth in future years led CTA and the California School Boards Association to threaten a lawsuit challenging the plan.
  • Pending legislative approval, CDE and CTA negotiated a compromise to the Governor's plan would remove an obstacle to resolving the FY 2024-25 state budget by the June 15 deadline:
    • For FY 2022-23:
      • Defer $2.6B from Proposition 98 to FY 2023-24 bringing FY 2022-23 allocation from $106.3B to $103.7B – an increase of $6.2B in Proposition 98 funding over the Governor's planned $97.5B.
    • For FY 2023-24:
      • Proposition 98 changes in FY 2022-23 raises Proposition 98 minimum by $4.2B over Governor's plan for FY 2023-24 which includes $2.6B deferred from FY 2022-23.
      • Defer $1.3B from Proposition 98 to FY 2024-25.
      • Suspend $5.5B in Proposition 98 funding for FY 2023-24 creating a maintenance factor to be repaid over time.
    • For FY 2024-25:
      • Proposition 98 minimum projected to increase to $110.6B which includes $1.3B deferred from FY 2023-24, first maintenance factor payment of $1.3B from FY 2023-24 suspension, and deferral of $2.4B to FY 2025-26 – an increase of $1.5B over the Governor's plan.
    • $8.4B would be drained from Proposition 98 reserve fund and $1.3B general fund repayments each year for 5 years to pay off Proposition 98 shortfall, including the $2.6B deferral from FY 2022-23, and $5.5B suspended in FY 2023-24.


Speaker Rivas, Pro Tem McGuire Announce Joint Legislative Budget Proposal, Hearing Scheduled This Week

Press Release: Office of Mike McGuire, California State Senator District 02

  • Joint announcement of a budget plan between the Assembly & Senate that is balanced through both the 2024-25 and 2025-26 budget years.
  • Proposes responsible budgeting reforms:
    • Updates size of Rainy Day Fund from 10% to 20% of state budget.
    • Excludes deposits into Rainy Day Fund from Gann appropriations limit.
    • Creates new “Projected Surplus Temporary Holding Account” where a portion of any projected surplus will be held until a future year once it is clear whether the projected surplus of revenues actually materialized.
  • Funds Proposition 98 about $1.9B higher than May Revision while holding programmatic funding at levels roughly the same as the May Revision, but funds more out of the existing guarantee which results in less reliance on Proposition 98 Rainy Day Fund.
  • Legislature continues to examine the Administration's updated Proposition 98 proposal.
  • Restores full funding for the Middle Class Scholarship program.
  • Implements a modified Cal Grant Reform which will benefit lower income students – particularly those at Community Colleges.
  • Provides $20M in one-time Proposition 98 funds to assist community college financial aid offices with unexpected workload and circumstances due to FAFSA delays and to help support students who are still trying to complete the FAFSA.
  • Rejects cuts to California Youth Apprenticeship, California Youth Leadership Corps, and High Road Training Partnerships in Health & Human Services programs.