Budget Cycle

Governor Submits Budget
January 10 

Fiscal Year Begins
July 1
Governor Signs Budget 
June 27

Budget Links

FY2023 (enacted)
FY2023 (proposed)
FY2022 (enacted)
FY2021 (enacted)
FY2020 (enacted)
FY2019 (enacted)
FY2018 (enacted)

Proposed Budget - Fiscal Year 2023

On January 10, California Governor Gavin Newsom introduced his budget proposal for fiscal 2023. The budget calls for total state expenditures (excluding federal funds) of $286.4 billion, including $213.1 billion in general fund spending for fiscal 2023. This represents a 1.5 percent general fund increase compared to spending levels in fiscal 2022. The budget is based on total general fund resources for fiscal 2023 of $219.4 billion, including a $23.7 billion beginning balance and $195.7 billion in annual revenue after a $1.6 billion transfer to the rainy day fund. General fund revenues, prior to transfers, are forecasted to decline 2.2 percent in fiscal 2023 compared to fiscal 2022. The recommended budget projects reserve balances of $20.9 billion in the Budget Stabilization Account/Rainy Day Fund (BSA), $9.7 billion in the Public School System Stabilization Account (PSSSA), and $900 million in the Safety Net Reserve. Additionally, the general fund ending balance is expected to be $6.2 billion, including a $3.2 billion Reserve for Liquidation of Encumbrances and $3.1 billion in the Special Fund for Economic Uncertainties (SFEU). This amounts to combined budgetary reserves (BSA, PSSA, SFEU and Safety Net) of $34.6 billion (16.2 percent of recommended general fund expenditures for fiscal 2023), and a total balance of $37.8 billion. The governor also recommends some changes to allocations of Coronavirus State Fiscal Recovery Funds (CSFRF) from the American Rescue Plan Act (ARPA), namely increasing the allocation for revenue replacement by roughly $2 billion and shifting the cost of certain programs supported by CSFRF to the general fund, to increase funding flexibility and streamline reporting requirements.

Proposed Budget Highlights 
The governor’s “California Blueprint” budget proposal for fiscal 2023 continues to build on recent investments, supporting efforts to promote the health and safety of state residents, address inequality, and foster a robust economic recovery. The governor’s priorities focus on responding to COVID-19, combatting climate change, confronting homelessness, increasing affordability for families and small businesses, and strengthening public safety. The governor’s Blueprint prioritizes one-time spending with surplus funds while continuing to bolster reserves and pay down long-term liabilities. Fiscal 2023 budget priorities include:

COVID-19 Response

  • $1.3 billion one-time to increase vaccine distribution, including boosters, testing and medical personnel (see Early Budget Action Items below for a description of a supplement to fiscal 2022)

Public Health Infrastructure

  • $300 million ongoing general fund to support a set of core services that underpin the work of state and local public health departments and serve to modernize the state’s public health infrastructure
  • $235 million general fund to maintain and operate information technology platforms and applications stood up during the COVID-19 pandemic that are necessary to support public health services statewide

Education and Child Care

  • $3.4 billion ongoing for expanded-day, full-year instruction and enrichment programs for K-12 students, and $937 million one-time to integrate arts and music into these enrichment programs
  • $2.2 billion one-time over two fiscal years to support school facilities construction and modernization
  • $1.5 billion for K-12 college and career pathways in education, health care, technology, and climate-related fields
  • $1 billion to begin first year of universal transitional kindergarten for all four-year-olds
  • $772 million one-time to support early literacy efforts
  • $596 million ongoing and $450 million one-time to support access to universal subsidized school meals that incorporate more fresh, minimally processed California-grown foods
  • $500 million one-time to support inclusive preschool classroom infrastructure.
  • $500 million to support special education
  • $500 million one-time to strengthen and expand student access and participation in dual enrollment opportunities
  • $309 million to further serve dual language learner students and students with disabilities in preschools

Workforce Training and Higher Education

  • $1.7 billion to expand health and human services workforce
  • $750 million for the second year of a planned total three-year investment of $2 billion one-time in grants for affordable higher education student housing.
  • $515 million for student financial aid through an updated Middle Class Scholarship program
  • Proposes multi-year funding compacts with state universities and a roadmap to guide community college investments. Both compacts and the roadmap include, among other goals and priorities, a focus on linking curricula to workforce needs. The Administration would propose base increases of 5 percent each year of the compact for the University of California and California State University segments on condition that certain goals are achieved.

Climate Change

  • $648 million to invest in wildfire response personnel and equipment and $1.2 billion over two years for wildfire and forest resilience to advance critical investments in forest health and fire protection to continue to reduce the risk of catastrophic wildfires.
  • $750 million for drought resilience and response
  • $2 billion in clean energy investments over two years for various incentive programs
  • $9.1 billion ($4.9 billion general fund and $4.2 billion bond funds) to continue developing the high-speed rail system and other transportation infrastructure projects
  • $6.1 billion from several fund sources over 5 years for investments that advance the acceleration of Zero-Emission Vehicles
  • $250 million in annual tax credits for three years for companies investing in research to mitigate climate change and $100 million in annual tax credits for those developing green energy technologies

Housing and Homelessness

  • $2 billion one-time general fund in additional funding for behavioral health housing and encampment cleanup grants
  • $1.5 billion in one-time general funds over two years to create more sustainable and affordable housing


  • $400 million ($200 million general fund and $200 million federal funds) for provider payments focused on closing equity gaps in preventative care for families and children
  • Expand Medi-Cal to all income-eligible residents, regardless of immigration status
  • $2.8 billion ($982.6 million general fund) to continue the implementation of the California Advancing and Innovating Medi-Cal initiative

Public Safety

  • $285 million over three years in local law enforcement grants to increase enforcement of theft-related crimes, increase local law enforcement presence in retail locations, and to increase local prosecution resources.
  • $51 million over three years and ongoing for theft related investigation and statewide taskforces.
  • $67 million one-time investments for local government gun buyback programs, aid to small businesses affected by retail theft, a drug interdiction program, and firearm violence research.


  • $3 billion over two years to pay down a portion of the Unemployment Insurance debt.
  • $2.3 billion for supply chain investments, including $1.2 billion for port, freight, and goods movement infrastructure and $1.1 billion for other related areas such as workforce training and ZEV equipment and infrastructure related to the supply chain.

Early Budget Action Items

  • COVID-19 direct response costs (referenced above in COVID-19 Response)—Cost estimates for COVID-19 direct response activities for fiscal 2022 grew to $3.6 billion one-time, or $1.9 billion above the $1.7 billion authorized in fiscal 2022. The additional $1.9 billion one-time is for testing, vaccinations, medical surge personnel, and additional personal protective equipment and medical supplies.
  • Support for Businesses
    • Restores, one year earlier than under current law, business tax credits that were limited during the COVID-19 Recession, reducing revenue by $5.5 billion
    • Additional tax relief for small businesses through federal conformity, reducing revenue by $274 million over fiscal years 2021-22 and 2022-23
  • $150 million to provide additional COVID-19 relief grants to small businesses
  • Paid sick leave--requires employers with 26 or more employees to provide up to 80 hours of COVID-19 supplemental paid sick leave to employees through September 30, 2022.