State Budget

Governor Signs Budget Bill After Reaching Agreement With Democratic Leaders

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Governor Gavin Newsom signed the 2023-24 state budget June 27 after reaching a privately negotiated agreement with Democratic legislative leaders on changes to be made by follow-up bills.

The main budget bill, SB 101 (Skinner), reflected the Democratic leaders’ priorities but did not include all of the provisions sought by Newsom. The Legislature approved the bill on the deadline for lawmakers to send a budget to the governor or forfeit their pay, and acknowledged that it was a placeholder that would be amended heavily.

Those amendments were introduced – and several were quickly approved – this week in several “trailer bills.” The votes on many of the trailer bills occurred shortly after the bills had been in print for 72 hours – the minimum amount of public availability required by the constitution before votes are allowed.

With the changes, the total budget for the 2023-24 fiscal year (which begins tomorrow), will be $310 billion – much closer to the legislative proposal ($311.7 billion) than the governor’s May revision ($306.5 billion), and up from the $307.9 billion budget approved last year when the state projected a massive operating surplus.

“In the face of continued global economic uncertainty, this budget increases our fiscal discipline by growing our budget reserves to a record $38 billion, while preserving historic investments in public education, health care, climate, and public safety,” Newsom said in a written statement. “We’ve attached new accountability measures for transit and homelessness investments. And we are accelerating our global leadership on climate by fast-tracking the clean energy projects that will create cleaner air for generations to come. As we build the California of the future, we’re expanding our economy and embracing businesses that pave the way with new tax credits for businesses that manufacture computer chips, clean energy facilities, and more – projects that disproportionately benefit disadvantaged communities and create hundreds of thousands of jobs.”

The tax credits referenced by the governor are included in SB 131 (Senate Budget and Fiscal Review Committee), which was approved June 27 by both houses (see details below).

Senate President Pro Tem Toni Atkins said the budget “allows us to close the budget gap [the projected operating deficit of $31.5 billion if no changes were made], make targeted new investments, and provide services and resources for Californians and our communities without cuts to core programs or dipping into our reserves, and in fact builds those reserves.”