California Update: State Legislature Passes its Version of the 2023-2024 Budget

June 22, 2023

Pardon Our Dust

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The California State Legislature recently passed its version of the 2023-2024 State Budget on June 15th, meeting its constitutional deadline to do so. The $311.7 billion spending plan approves various key components of the Governor’s budget that was presented as part of his May Revision, which includes maintaining or increasing funding for various programs including those within K-12, higher education, health coverage, and homelessness.

However, amid a projected $31.5 billion budget deficit, there are certain differences to work out between both versions. The Governor and the State Legislature will continue negotiating prior to the start of the new fiscal year on July 1st, by when the Governor is required to sign the budget. Outstanding issues to work out include environmental law reform to streamline infrastructure projects in the state, funding for public transit operators, prison reform, and additional funding for homelessness.

Below are key revisions that the Legislature reported regarding its spending plan. To take an in-depth look, please click here.

State Legislature’s Reported Key Revisions in Budget:

  • Schools and Community Colleges: Provides $2.1 billion increase.
  • Child Care: Provides $1 billion for temporary rate increases.
  • Higher Education: Avoids cuts and delays to infrastructure and student housing projects by shifting costs to bonds, expands financial aid programs to provide debt free college to foster youth, and provides ongoing increases to student support programs.
  • Public Transit: Provides $5.1 billion for transit across three years, with 100% flexibility for capital and operations expenses.
  • Medi-Cal: Provides $10.3 billion of increases through December 31, 2026 from the fiscal benefit of the Managed Care Operations Tax, rather than the eight to ten year period proposed by the Governor.
  • CoveredCA: Provides $165 million ($330 million ongoing) from penalty funds to lower copays and deductibles of CoveredCA plans beginning January 1, 2024.
  • Safety Net Reserve: Rejects proposed use of the Safety Net Reserve for purposes not intended for the reserve.
  • Greenhouse Gas Reduction Fund (GGRF): Provides $595 million in additional GGRF funding.
  • Climate and Energy: Protects key investments in Coastal Resilience and Clean Energy.
  • Strengthens Out-Year Commitments: Continues to “protect our progress” with actions to key programs:
    • Continues $1 billion for the HHAP program in 2024-25 to provide local partners the certainty that funding will be maintained beyond the 2023-24 budget year.
    • Provides $289 million for the Middle Class Scholarship program in 2024-25 to maintain current level of the program in that school year. The funding level for 2024-25 needs to be set in this budget, since the California Student Aid Commission needs to make award decisions for the 2024-25 school year during the 2023-24 budget year.
    • Eliminates statutory language that beginning in 2024-25 subjects CalWORKs grant levels to future appropriation. This ensures the executive branch cannot change grant levels without agreement with the Legislature.