Electric Car Incentives, Homeless Programs Feel the CA Budget Ax

Monday night, Gov. Gavin Newsom and legislative leaders finally announced they had reached a budget deal.

The bills will start being voted on today to finalize the agreement before the new fiscal year starts on July 1. The deal sets spending levels and policy across a wide range of issues affecting Californians.

Some Winners

• Covered California patients: California has collected more than $1 billion since the enactment of a tax that penalizes residents who don’t have health insurance. Newsom was going to temporarily move $333 million of the penalty money to the general fund. But advocates and lawmakers fought for the money to go toward Covered California’s cost-sharing reserve. The deal also commits $82.5 million to lower health insurance costs over the next year.

• Homebuyers: Saved from the chopping block were a few programs meant to help California residents buy homes. The Dream For All program, which offers state-backed home loans for first-time buyers, will receive an additional $200 million after having its initial funding drained in less than two weeks after its implementation by eager buyers.

A Handful of Losers

• Climate change advocates: The budget slashes $5 billion from climate change programs, including incentive programs for zero-emission vehicles, despite the governor banning new gas-powered cars in California by 2035. Some funding was restored for smaller climate-related programs, however. Newsom is also seeking federal climate funding from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.

• Cities dealing with homelessness: Though the budget includes $1 billion for local programs, it’s only a third of the $3 billion city officials lobbied for in guaranteed state funding. Local leaders and activists say that Newsom’s current approach of handing out one-time annual grants rather than guaranteed ongoing funding does not help solve the state’s enduring homelessness crisis.

A Mixed Bag for Others

• K-12 teachers and schools: The budget includes a historic 8.22% cost-of-living adjustment for public schools, $1 million for the Department of Education to establish a dyslexia screening task force, and $300 million allocated for schools with the highest concentrations of poor students. But there were also some cuts: a $200 million decrease to an arts and music grant and a $1.6 billion reduction in the Learning Recovery Block Grant.

• Transit agencies will receive $5.1 billion over four years, though the money will be subject to accountability measures and state oversight. Because the funds will only keep agencies afloat over the next fear years as they face a looming “fiscal cliff,” Democratic Sen. Scott Wiener from San Francisco has authored a bill to hike tolls on seven Bay Area bridges. The proposal would bring in about $180 million annually.

Read a full rundown of what you need to know about the budget deal from the crack CalMatters team of reporters.

About the Author

Lynn La is the WhatMatters newsletter writer. Prior to joining CalMatters, she developed thought leadership at an ed-tech company and was a senior editor at CNET. She also covered public health at The Sacramento Bee as a Kaiser media fellow and was an intern reporter at Capitol Weekly. She’s a graduate of UC Davis and the Columbia University Graduate School of Journalism.

About CalMatters