What are the big takeaways from Gov. Gavin Newsom’s updated 2023-24 budget proposal, the so-called May revise?

The impact of climate change. Fiscal restraint with a looming recession. And almost certainly, no tax increases to cover the growing budget deficit.

The spending plan Newsom unveiled Friday anticipates a $31.5 billion deficit, up from $22.5 billion projected in his January proposal. He calls for spending $306 billion, which is just 1% less than the record $308 billion budgeted for this year, and he seeks to protect the state’s continued investments in some programs, such as in housing and health care, while stopping short of adding any costly new initiatives.

• Newsom: “We have a $31.5 billion challenge, which is well within the margin of expectation and well within our capacity to address…. Right now, we’re able to submit a budget that we think is prudent and it’s balanced.”

For more details about Newsom’s spending plan, get the full analysis from the CalMatters’ team. Keep in mind the governor’s proposal isn’t the end. Rather, it kicks off nearly a month-long negotiation with the Legislature, which has until June 15  to pass the budget in order to get paid.

Here’s a quick rundown on some of the budget’s biggest winners and losers:

Winners

Dyslexia screening backers: As someone who struggles with dyslexia himself, Newsom added $1 million for teacher training and a requirement for dyslexia screening, despite pushback from the California Teachers Association. Sen. Anthony Portantino, a Glendale Democrat who authored the bill to screen for dyslexia and also has dyslexia, celebrated the news.

• Portantino, to EdSource: “This is a great day for kids in California. The governor had it right. He and I both understand the urgency of this issue.”

Foster youth advocates: Newsom restored $20 million to the Court Appointed Special Advocates program, which advocates for foster youth and supports about 16% of California’s foster population.

Flood protection supporters: An additional $290 million to the flood control budget brings the total that Newsom proposes to invest in flood protection to $492 million.

Public health agencies: Newsom restored $50 million for public health workforce training programs that were cut in his January proposal.

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Losers

Climate programs: In January, Newsom slashed $6 billion from the $54 billion five-year climate package. His May proposal put another $1.1 billion for climate resilience programs in jeopardy if a “climate bond” isn’t approved.

• Sen. Josh Becker, a Menlo Park Democrat, in a statement: “I am worried about the state’s ability to meet its climate targets with the current levels of investment.”

Child care providers: On top of delaying funds for 20,000 of next year’s new child care slots, which Newsom proposed in January, his May revise provides only an 8% cost-of-living raise, compared to providers’ requests for a 25% increase in reimbursement rates.

Public transit systems: Despite pleas from local agencies, Newsom unveiled no aid as they face a dire “fiscal cliff.”

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School arts programs: Newsom slashed proposed grants for arts, music, and instructional materials from $2.3 billion in his January proposal to $1.8 billion.

Prison towns residents: Newsom cut the California Department of Corrections and Rehabilitation budget by more than $100 million and he’s moving forward with closing correctional facilities in Blythe and California City by 2025.

Struggling hospitals: Hospitals did not get the $1.5 billion in immediate relief they had been seeking. But Newsom did allocate $150 million to establish a loan program for distressed hospitals.

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.

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