GOVERNOR NEWSOM RELEASES “MAY REVISION” OF STATE BUDGET No Proposed Cuts to Library Budgets

May 12, 2023

TO:                 CLA MEMBERS/ SYSTEMS/ NETWORK CONTACTS

FROM:           Christina DiCaro, CLA Lobbyist

RE:                 News From the Capitol

1. GOVERNOR NEWSOM RELEASES “MAY REVISION” OF STATE BUDGET

   No Proposed Cuts to Library Programs

   This morning Governor Gavin Newsom released his “May Revision” of the State Budget before the press corps in Sacramento.  As you may recall, in January the Governor released his 2023-24 State Budget proposal which identified a $22.5 billion budget shortfall.  Today, the Governor announced that the budget deficit has grown another $9.3 billion which will put the total budget deficit in the range of $31 billion.  The increased downturn in revenues is  largely due to the volatility of the state’s tax structure, particularly the reliance on high income earners and their fluctuating corporate and personal income tax receipts.  Under that structure, when there are sizeable changes for that segment of tax filers in terms of capital gains taxes, inflation, etc., California’s deficits can swing wildly. 
   
   Despite the challenges facing the Governor and legislature this year in attempting to address the $31 billion deficit, the Governor is proposing no cuts to public libraries in his May Revision. 

   The May Revision of the State Budget is an opportunity for the Governor to make changes to his January Budget once he has a sense of the state’s fiscal health, after having taken into account the April tax receipts.  You may recall, however, that numerous counties were given tax filing relief this year due to the emergency storm declarations at the start of 2023.   Individuals in those affected counties found that their tax filing was delayed until October.  As you can imagine, the October tax deferral creates all sorts of unique challenges for the Governor and legislature as they attempt to pass a Budget by the constitutional deadline of June 15^th, all the while not knowing the full extent of the taxes coming into the state coffers until mid-October.      

   For the time being, to address the $31 billion budget deficit, the Governor proposes a series of fund shifts, reductions, and deferrals of programs that the legislature and Governor had hoped to finance if revenues had remained stable.  The Governor and legislature are to be commended for creating a substantial Budget reserve over the past few years, in anticipation of a future economic downturn, such as the one we are seeing projected for Budget year 2023-24.  The Governor’s January Budget does not propose tapping the reserves yet, and neither does his May Revision released today.  As the Governor said in his press conference this morning, there are too many looming risks ahead such as the debt limit impasse, higher interest rates, uncertainty in financial institutions, and other factors that would not make it prudent to tap the reserves at this early juncture. 

   CLA members may recall that the Governor’s January Budget would defer $100 million in library construction grants - intended to be allocated this year - to future years because of the budget deficit.  Instead, the Governor suggests providing $33 million in library infrastructure grants in 2024-25, $33 million in 2025-26, and $33 million 2026-27.  (There was no change on this item in the Governor’s May Revision.) 

2. SENATE DEMOCRATS PROPOSE $100 MILLION IN LIBRARY CONSTRUCTION GRANTS
   
   

   On April 26, the Senate Democrats released a Budget Plan entitled, “Protect our Progress,” which represents their goals, “key values,” and a framework regarding the 2023-24 State Budget.   One important highlight contained in the plan is a new $10 billion Housing and Infrastructure Fund, which would be paid for using an internal borrowing mechanism.  Included in that proposal is to spend “$100 million for Library Infrastructure Projects that the Governor proposes to be delayed.” 

   On April 27^th, the Senate Budget Subcommittee on Education Finance reviewed the State Library items in the Budget, including the proposed library infrastructure grant deferral.  At the hearing, Chair Senator John Laird asked State Librarian Greg Lucas about the ongoing library construction need.  The State Librarian said that he anticipated receiving applications for the next round of funding totaling $600 million to upwards of $1 billion.  The subcommittee held the item “open” and no action was taken.  During public comment, I was able to thank the Senate President pro Tem Toni Atkins, Senate Budget Chair Nancy Skinner, and the Senate Budget Subcommittee on behalf of CLA, for their ongoing support of the library infrastructure grants and for including another $100 million in their “Protect our Progress” plan. 

   On May 2, the State Library issues were on the agenda in the Assembly Budget Subcommittee on Education Finance, where the State Librarian gave a similar overview of the library construction grant program.  Subcommittee Chair, Assemblyman Kevin McCarty noted that the library construction grants were a great use of one-time funds when they come available. 

   In the coming days, in a “News From the Capitol” update, I will provide information on how CLA members can write the members of the Budget Subcommittees to encourage their support for the $100 million library infrastructure grant proposal in this year’s state Budget.    

3. GOVERNOR NEWSOM’S “LOVE LETTER TO LIBRARIANS”

Governor Newsom recently penned an article for EdSource entitled, “Gov. Newsom’s love letter to librarians” which can be found on the CLA website.  The Governor has been very open about his struggle with dyslexia and notes in the article that:  “Through support, advice, and mentorship from specialists, educators, and librarians too numerous to list, I didn’t just fall in love with words…my life started revolving around them.  Because people – people like you – took the time to care about me, to show me the power of words and the power of books, I was able to find my footing in business, service, and eventually, elected office.  I am in your debt.”  The article is heartwarming and heartfelt and I hope that you will take time to read it when you have a moment.  I want to thank CLA President Gary Shaffer, as well as members of the CLA Legislative Committee, and the California County Librarians Association for sending the Governor tweets and letters of support for the kind words expressed in the article.