CALIFORNIA—On Wednesday, February 21, the California State Legislative Analyst’s office announced that the state of California is facing a $73 billion deficit, which is $15 billion over what was projected in January.

According to the California State Department of Finance, the preliminary receipts from the general fund for January came in $5 billion lower than Newsom initially projected.

On February 2 of this year, Governor Newsom announced a $15.5 billion investment by the Biden-Harris Administration. The funding comes out of the Inflation Reduction Act and is to be used as a climate investment in clean energy.

In the January 10 edition of the school finance publication, EdSource, author, John Fensterwald addressed the deficit and Governor Newsom’s promise to defer payments for monies needed for funding schools. The following information came directly from EdSource:

“We are deferring but not delaying, and there’s a distinction in the law that will allow UC and CSU just one year to be able to borrow against that commitment,” New some stated.

Newsom proposed the idea that he would protect schools and community colleges by withdrawing around $7 billion from the TK-14 rainy day fund.

According to the California Budget and Policy Center, the TK-14 Rainy Day Fund refers to the use of $18.8 billion of state reserves.

The Governor plans to use the funds to cover the minimum obligation for the 2024-25 school year.

Newsom indicated that the state would not, “seek reimbursement for what turned out to be funding above the minimum Proposition 98 statutory obligation for the prior two years.”

In addition, Newsom’s Proposition 98, would include the funding for the transitional kindergarten which would amount to close to 39.5 percent of the general fund.

In 2024-25 Proposition 98 funds are projected to be $109.1 billion, or $3.5 billion more than the revised projection from 2023-2024 indicating more state revenue during the next fiscal year.

The following came directly from the California Policy and Budget Center’s webpage:

As a result, the austerity measures used to cover the shortfall include some reductions and delays in funding that will disproportionately impact low-income communities and Californians of color, including ongoing cuts to CalWORKs supportive services (despite draining the Safety Net Reserve designed to avoid cuts to CalWORKs),  Delays to programs that help address homelessness, various reductions in funding for workforce systems and supports, and various reductions in climate and housing programs.

On December 8, 2023, Governor Newsom announced funding from the Biden-Harris Administration. $70 million from the Biden-Harris Administration is now available to help the State of California accelerate restoration of the Salton Sea, improving conditions for wildlife and surrounding communities.

The funding is part of a $250 million commitment from the Inflation Reduction Act, which complements the more than $500 million in state funding secured to date.