News from the Capitol: Governor Releases Budgeet

January 10, 2023

TO:             CLA MEMBERS/ GUESTS/ NETWORK CONTACTS

FROM:        Christina DiCaro, CLA Lobbyist

RE:             News From the Capitol

GOVERNOR NEWSOM RELEASES STATE BUDGET PROPOSAL

Popular library programs appear to be protected from cuts

This morning Governor Gavin Newsom released his January 2023-24 State Budget proposal in a press conference in Sacramento, calling it a Budget to “protect the most vulnerable Californians” during challenging fiscal times.  As had been anticipated, the state is facing a sizeable budget deficit this year, with the Governor’s office forecasting a $29.5 billion deficit that will need to be addressed with a series of actions.  The Governor suggests tackling the major deficit with a “balanced plan of funding delays, reductions and pullbacks, fund shifts, trigger reductions, and limited revenue generation and borrowing to address the budget problem.”  Over the course of the last few Budget cycles the Governor and Legislature, anticipating a future economic downturn or potential Recession, socked away a significant amount of funds in the state’s reserve accounts.  While the Reserves could possibly be tapped to address the $29.5 billion deficit, the Governor “does not propose to draw from the state’s reserve accounts to close the budget gap.” He writes in his Budget summary document: 

“Due to the work that the Governor and the Legislature have done to plan for a revenue shortfall such as this one, the Budget is able to maintain the majority of recent commitments, including continuing to build upon programs and services that the most vulnerable populations rely even more heavily upon during economic downturns.  However, considerable risks to the economy remain.  In particular, if the economy slips into a recession in the coming months, there will be more difficult decisions ahead. The Administration has taken steps in the Budget, such as not using the state’s reserves, to ensure there is additional capacity to protect the programs and services that California residents rely on…”

In what appears to be relatively positive news for public library funding given the state’s fiscal challenges, the Governor’s Budget does not propose cuts or deferrals to the historic, major appropriations that public library programs received in the 2021-22 and 2022-23 state budgets, including $439 million (Budget year 2021-22) and $50 million (Budget year 2022-23) for library infrastructure projects.  The Governor does propose suspending the $100 million that he and the legislature intended for public library infrastructure projects this Budget year, if the state’s fiscal picture would have allowed.  Instead, the Governor suggests that the $100 million for library infrastructure money intended for 2023-24 be delayed until 2024-25 at which time $33 million could be made available, then $33 million in year 2025-26, and $33 million in year 2026-27.  Again, this is just a proposal from the Governor, and it will be subject to extensive discussions with the legislature over the course of the next 5-6 months as the state Budget is developed.  Also, notable is that the Governor has chosen to protect funding for popular programs such as Lunch at the Library, the Dolly Parton’s Statewide Imagination Library, and online public library subscriptions for job training and workforce development programs.

The Senate and Assembly Budget Committees and their subcommittees will begin holding hearings on the various pieces of Governor Newsom’s Budget in the coming weeks.  The Governor will release a May Revision of his January Budget in mid-May, which will serve as an updated analysis of the state’s fiscal picture after the April tax receipts are in hand.  The legislature is required to send the Governor a Budget bill by the Constitutional deadline of June 15^th.