Budget Cycle

Governor Submits Budget
January 10 

Fiscal Year Begins
July 1
Governor Signs Budget 
June 27

Budget Links

FY2024 (enacted)
FY2024 (proposed)
FY2023 (enacted)
FY2022 (enacted)
FY2021 (enacted)
FY2020 (enacted)
FY2019 (enacted)

Enacted Budget – Fiscal Year 2024

Governor Gavin Newsom signed the state’s fiscal 2024 budget into law on June 27. The budget provides for total state expenditures (excluding federal funds) of $310.8 billion for fiscal 2024. This includes $225.9 billion in general fund spending, a 3.7 percent decline from fiscal 2023. The budget is based on a general fund revenue forecast of $208.7 billion for fiscal 2024, representing a 1.5 percent increase from fiscal 2023. The enacted budget projects a $37.8 billion balance (16.7 percent of general fund expenditures) in the state’s rainy day fund accounts (including the Budget Stabilization Fund, Public School System Stabilization Account, Special Fund for Economic Uncertainties, and Safety Net Reserve) in addition to $5.3 billion in the Reserve for Liquidation of Encumbrances, for a total balance of $43.1 billion. The budget includes a package of strategies to close a $31.7 billion budget gap without tapping reserves; these strategies include spending reductions, delayed spending, shifts of spending from general fund to other funds, revenue increases, and internal borrowing. Most of the additional revenue comes from the new Managed Care Organization (MCO) Provider Tax, effective April 1, 2023 through December 31, 2026. For K-12 education, the budget provides for the largest cost-of-living adjustment in the history of the Local Control Funding Formula (LCFF), which when combined with declining enrollment results in a $3.4 billion annual increase in discretionary resources for school districts. The budget also provides $300 million to establish an Equity Multiplier add-on to the LCFF to close opportunity gaps of historically underserved students, while continuing to invest in other K-12 priorities as well. The budget also provides base spending increases for higher education to maintain compacts with both state university systems. The enacted spending plan invests funds in public transit and efforts to address homelessness, while also establishing new accountability requirements for local governments and transit agencies in these areas. Additionally, the budget includes $52 billion in multi-year climate investments and commits more than $800 million across multiple programs to improve public safety.

Proposed Budget - Fiscal Year 2024

On January 10, California Governor Gavin Newsom introduced his budget proposal for fiscal 2024. The budget calls for total state expenditures (excluding federal funds) of $297.0 billion, including $223.6 billion in general fund spending for fiscal 2024. This represents a 6.9 percent general fund decrease compared to spending levels in fiscal 2023. This decrease reflects a series of budget management strategies proposed by the governor to close the state’s projected budget gap due to a slowdown in revenue, especially from capital gains taxes. The budget is based on total general fund resources for fiscal 2024 of $231.7 billion, including a $21.5 billion beginning balance and $210.2 billion in annual revenue after a $911 million transfer to the rainy day fund. General fund revenues, prior to transfers to the Budget Stabilization Account/Rainy Day Fund (BSA), are forecasted to increase 0.3 percent in fiscal 2024 compared to current estimates for fiscal 2023. The recommended budget projects reserve balances of $22.4 billion in the BSA, $8.5 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 $8.1 billion, including a $4.3 billion Reserve for Liquidation of Encumbrances and $3.8 billion in the Special Fund for Economic Uncertainties (SFEU) (the state’s operating reserve). This amounts to combined budgetary reserves (BSA, PSSA, SFEU and Safety Net) of $35.6 billion (15.9 percent of recommended general fund expenditures for fiscal 2024), and a total balance of $39.9 billion. With the BSA at its constitutional maximum balance, $951 million is required to be dedicated to infrastructure investments in fiscal 2024.

Proposed Budget Highlights 

The governor’s budget proposes using a balanced approach to address the state’s projected budget gap in fiscal 2024 and future years. By building strong reserves, paying down debt, reducing retirement liabilities, and focusing on one-time investments in the last several budgets, the state is able to continue investing in key priorities as it manages the slowdown in revenue. These priorities include transforming education, addressing homelessness and expanding housing affordability, increasing health care access, fighting climate change, bolstering public safety capacity, and fostering economic development. 

Closing the Budget Gap

  • $7.4 billion in funding delays for various items, spreading out their cost over multiple years without reducing the total amount of funding
  • $5.7 billion in reductions and pullbacks, including a $3 billion inflationary adjustment in the fiscal 2023 budget and a $750 million unemployment trust fund payment planned for fiscal 2024
  • $4.3 billion in fund shifts to reduce general fund costs
  • $3.9 billion in reduced funding for baseline and caseload adjustments and other commitments, which would be restored through a budgetary “trigger” in January 2024 if sufficient funds become available (some planned reductions are described further below)
  • $1.2 billion in loans from special funds and Managed Care Organization Tax renewal


  • $690 million for the second year of expanding transitional kindergarten access and $165 million to increase school staff for transitional kindergarten classrooms
  • $2 billion in sustained investment to expand subsidized childcare access
  • $1.4 billion for universal free school meals
  • Sustains second year of multi-year compacts with state universities and a roadmap with community colleges to increase affordability and improve student outcomes

Workforce Development

  • Invests $2.065 billion in job training, apprenticeship and other workforce programs, reflecting a $135 million reduction in planned investments, of which $110 million would be restored by the trigger

Homelessness and Housing

  • Maintains 88 percent of budgeted allocations for housing programs in fiscal 2023 and fiscal 2024, with proposed reductions included in trigger
  • Maintains investments in a comprehensive homelessness strategy

Health and Human Services

  • Maintains Medicaid eligibility regardless of immigration status
  • $10 billion total fund sustained investment to continue transforming health care delivery system
  • $8 billion sustained investment to expand and transform behavioral health services, particularly for children and youth
  • $1 billion for increased cash assistance to vulnerable populations
  • $1.2 billion to improve services for the developmentally disabled
  • Maintains $200 million for reproductive health services and adds $200 million for a family planning grant program and related services in fiscal 2025


  • Maintains $48 billion multi-year commitment (89 percent of previously planned investments) in the state’s climate agenda, with program reductions included in trigger 


  • Includes multi-year commitment of $44 billion for infrastructure investments such as transitioning to zero-emission vehicles, modernizing the transportation system, promoting energy innovation, increasing broadband, boosting housing supply, reducing wildfire risk, and supporting drought resiliency

Public Safety

  • Sustains $564 million over three years to strengthen local law enforcement efforts to combat fentanyl prevalence, retail theft and other crimes