July is a time of celebration, with Independence Day activities and San Diego Pride’s parade, festival, rally and other events.

July is also the start of a new fiscal year for the state, and at the end of June the Legislature passed the final version of the Budget Act of 2023. The budget contains $310.3 billion in total spending, including $225.9 billion from the General Fund, providing a strong fiscal plan for California.

We started our budget process this time around with tough economic challenges, and with a budget shortfall approaching $30 billion. The Senate approached these challenges with one overarching goal: to protect California’s progress.

In good years, we buckled down so that in tough years like this one, we could meet our needs. That pragmatic approach works for household budgeting, and it works for state budgeting.

The budget we adopted, after holding more than 120 public hearings and negotiations with the Administration, does exactly that. It allows us to close the budget gap, make targeted new investments, and provide services and resources for Californians and our communities without cuts to core programs or dipping into our reserves, and in fact builds those reserves to $37.8 billion – the highest in history. This will help protect future budgets during these times of economic uncertainty.

The approved budget:

• Provides an historic 8.22% cost-of-living adjustment for public schools.
• Provides $1.4 billion over two years to supplement reimbursement rates for all child care providers and $1.5 billion for State Preschool programs for the same purpose.
• Waives child care and state preschool fees through September 30, and beginning October 1 eliminates fees for families below 75% of the state median income. Fees for families above that threshold will be capped at 1% of monthly income.
• Funds continued implementation of expanding Medi-Cal access to all adults regardless of immigration status.
• Provides $500 million in ongoing funds beginning in 2024-25, making permanent a 10% grant increase to help California’s most vulnerable families.
• Implements a program for available funds for the Managed Care Organizations (MCO) tax to provide for Medi-Cal reimbursement rate increases and other investments.
• Provides $1 billon in Homeless Housing, Assistance and Prevention funding in support of local efforts to reduce and prevent homelessness, and establishes an intent and expectation that this funding level will continue into the 2024-25 fiscal year, as well as adding accountability provisions to those local funds.
• Rejects proposed cuts to public transit, and makes $5.1 billion in transit funding 100% flexible for capital and operations expenses and accountability provisions.
• Ensures that the tax penalty on Californians without health insurance is used to lower co-pays and deductibles of CoveredCA healthcare plans beginning January 1, 2024.
• Allocates $1 billion in coastal resilience and clean energy programs and restores $300 million for the State Coastal Conservancy.
• Approves base increases for the University of California, California State University and California Community College (CCC) systems.
• Preserves Higher Education Student Grant Program funding for current and planned CCC affordable housing projects by shifting all General Fund support to bonds, and provides $200 million in General Fund in this fiscal year, and $300 in each of the following five years, to provide zero-interest loans at qualifying UC, CSU and CCC campuses to construct affordable student, faculty, and staff housing.
• Maintains proposed 2023-24 funding for the Middle Class Scholarship for the 2024-25 school year to maintain efforts to reach the goal of debt free college.
• Protects funds for the California Dream for All program that I created that provides shared-equity down payment assistance program for first time homebuyers. This restores the $200 million cut the Governor proposed to the $500 million allocated for this year. The first $300 million was exhausted after the program was open for only eleven days. Program eligibility will be refined to lift up homebuyers from historically-excluded communities.

I appreciate the partnership of Governor Gavin Newsom and Assembly Speaker Anthony Rendon, and the tireless work of our Legislative colleagues and staffs, including our budget chairs and subcommittee chairs who worked around the clock to get us across the finish line by the end of June.

You can view the full budget at the California Department of Finance website.