HOPE’s Response to the Final 2024–2025 State Budget
On June 29, 2024, Governor Gavin Newsom signed into law the final 2024–2025 budget for the state. The $297.9 billion spending plan addresses a $46.8 billion deficit, and maintains the multi-year fiscal structure proposed by the Governor in the May Revision to balance the budget in this 2024–25 fiscal year and the next. The state has taken several measures to address the shortfall, including nearly $16 billion in budget cuts across a series of programs. Though some reserves were used, the state still maintains $22.2 billion in total reserves to ensure the state’s long-term ability to weather future shortfalls.
The final budget is a culmination of months of negotiation and stakeholder engagement, directly reflecting our priorities and values. For Latinas, who make up 20% of California’s population and the plurality of women (at 39%), the budget impacts every aspect of our lives. Ensuring fair and equitable funding is essential not only for our community but for the prosperity and future of our entire state.
“HOPE commends our California State leadership for a balanced budget that maintains service levels for education and delivers on the commitment to expand Health care for all, which we know addresses severe health inequities in our communities. We also deeply appreciate the funding protections for the Latina Futures 2050 Lab, which sets California apart in addressing the gender equity gap and invests in Latinas so they can reach their full potential.
However, we are disappointed by the lack of funding for Cal Grant Reform in the final budget agreement, which we know would have the impact of addressing college affordability for hundreds of thousands of students across the state.
The state budget is a powerful tool that can deliver equitable education, accessible healthcare, and economic opportunities for our diverse communities. We will continue to advocate for a budget that meets the unique needs and potential of Latinas and equips our communities with the resources they need to thrive in California,” said Helen Torres, CEO and Executive Director of HOPE.
Strategies to Balance the Budget:
●Tapping into Budget reserves: The final budget agreement withdraws $12.2 billion from the Budget Stabilization Account (Rainy Day Fund) over the next two fiscal years — $5.1 billion in 2024–25 and $7.1 billion in 2025–26 and $900 million from the Safety Net Reserve in 2024–25. Spreading the use of the rainy-day fund over two years allows more of the structural budget issues to be addressed in 2024–25 and provides greater budget resiliency. Despite these withdrawals, it leaves $22.2 billion in total reserves at the end of the 2024–2025 fiscal year.
● Spending cuts: The final budget includes $16 billion in spending cuts.
● Revenue/Internal Borrowing: The final budget includes additional support from revenue sources and borrows internally from special funds, bringing this total to $13.6 billion.
● Fund Shifts: The agreement shifts $6 billion in expenditures from the General Fund to other funds.
● Delays and Deferrals: The budget delays $3.1 billion in funding for some projects and defers $2.1 billion in payments to future fiscal years.
The sections below give updates on the status of HOPE’s budget priorities:
EDUCATION
Funding protections:
● Latina Futures 2050 Lab: HOPE is grateful to the Governor and Legislature for rejecting cuts to the UC Labor Centers and the UCLA Latino Policy and Politics Institute in the final budget agreement. The May Revise proposed pulling back $13.7 million that had been previously allocated for the Latina Futures 2050 Lab spearheaded by the Chicano Studies Research Center in partnership with the Latino Policy and Politics Institute. We sincerely appreciate the leadership of the California Latino Legislative Caucus in advocating for the protection of this critical funding.
The Latina Futures, 2050 Lab envisions equity for Latinas, and by extension, women of color by 2050. The allocation of these funds, focused on Latinas, sets California apart as a leader in addressing the gender equity gap and recognizing the untapped opportunities present in our Latino communities.
● Golden State Teacher Grant Program: Support for the Golden State Teacher Grant program of $110.2 million from the General Fund and $1.5 million in federal funds. Additionally, the Budget includes statutory changes that are designed to sustain the program through the 2024–25 fiscal year.
Funding cuts:
● Learning Aligned Employment Program: Reduced by the $485 million suggested in the May revision. Designed as an alternative to traditional work-study hours, the LAEP helped low-income students connect with career-building jobs that advanced their major or professional interests. Although this reflects the program’s unspent funds, it limits the program’s ability to continue the critical work of fostering opportunities for students to access education-aligned and career-related employment.
● Middle-Class Scholarship: The final budget cuts the Middle-Class Scholarship by $110 million ongoing starting in 2025–26, instead of the May Revision’s proposed $510 million reduction. It also provides a one-time general fund increase of $289 million to support the program. Based on 2022–2023 data, we know that nearly 41.5% of students who benefited from this award identified as Hispanic, and 39.4% identified as women.
Cal Grant Reform
As a member of the Cal Grant Reform Coalition, HOPE is disappointed that the final budget agreement does not include funding for Cal Grant Reform. Every member of our wide-ranging coalition from across the state remains fully committed to making California postsecondary education affordable and accessible for all — especially for our lowest-income Californians.
We sincerely appreciate Assemblymembers David Alvarez’s and Mike Fong’s leadership and tireless efforts in advocating for Cal Grant Reform and thank the Legislature for including this proposal in Budget Bill AB 107. Due to their efforts and strong voices, and with this year’s overall investments in higher education, we are in a position to push forward in the coming years, despite one of the toughest budget periods California has and will continue to face.
We look forward to working alongside the Governor and Legislature to prioritize any future financial aid investments for low-income students who are being locked out of the opportunity to pursue a college education due to financial constraints. This includes fully funding and implementing the Cal Grant Reform Act, a promise made to students in 2022.
Read Dolores Huerta’s Op-Ed on Why Cal Grant is key to addressing inequities in higher education.
HEALTH
Funding protections:
● Behavioral Health Workforce: HOPE is thankful that the program was not eliminated as proposed in the may revision and that California continues to invest in these critical initiatives. Although the budget reduces General Fund expenditure authority of $70.1 million, it’s far better than the initial $189.4 million reduction. The budget also gives expenditure authority from the Mental Health Services Fund of $51.9 million in 2025–26 for workforce development initiatives to expand the number of social workers in California. According to the Medical Board of California, only four percent (4%) of active psychiatrists practicing in California are Latino and only two percent (2%) are Black. HOPE looks forward to seeing the full implementation of these workforce programs for the benefit of our diverse communities.
Funding cuts:
● Behavioral Health Continuum Infrastructure Program (BHCIP): — A reduction of $450.7 million. This leaves $1.75 billion ($1.2 billion General Fund) to support existing projects.
● Children and Youth Behavioral Health Initiative: The final budget reduces a total of $72.3 million in funding from 2023–2024 and $313.9 million General Fund in 2024–25 for school-linked partnership and capacity grants for higher education institutions, services and supports platform, evidence-based and community-defined grants, and public education and change campaigns. Despite these cuts, the budget maintains $4.1 billion across several departments to support Children and Youth Behavioral Health Initiative efforts.
● Cuts to Healthcare Workforce: The final budget included $746.1 million in reduction to various healthcare workforce programs.
HOPE has called for targeted workforce investments that increase the representation of Latinas in the health field. Our California Equity in Mental Health Survey notes that our current health and mental health care delivery and support systems have not been designed nor equipped to support the needs of Black women and Latinas. Cuts to these workforce programs and behavioral health infrastructure limit access to culturally competent, quality health care for our diverse communities.
We look forward to working with the Governor and Legislature to ensure these critical programs are funded in the future.
HUMAN SERVICES
Funding protections:
● In Home Supportive Services Program (IHSS) for undocumented adults: HOPE is appreciative that the final budget rejects the previously proposed cut to IHSS services regardless of immigration status. Our 2024 Economic Status of Latinas Report highlights that older Latinas were more likely to feel the effects of the economic disruption than older White women, a pattern seen during previous economic downturns. Cuts to the IHSS program for undocumented adults in California would have eliminated home care services for thousands of Californians with disabilities and seniors.
Funding cuts:
● Cuts to CalWORKs: The final budget eliminates the planned increase of CalWORKs’ Employment Services Intensive Case Management, reduces funding for CalWORKs’ Expanded Subsidized Employment Program, and reduces funding for CalWORKs’ Home Visiting Program by $30 million in 2023–24 and $25 million in 2024–25 and 2025–26.
While HOPE commends the Governor for not making severe changes to the provision of basic needs services, like CalFresh and SSI/SSP, we remain concerned with cuts to critical safety net programs like CalWORKs. HOPE data from our 2024 Economic Status of Latinas Report shows that the poverty rate for Latinas in California was 16.5% in 2021, nearly double that of White women (8.5%) and Latino families are overrepresented among the lowest income levels. Safety net programs are critical to lift Latinas out of poverty and foster economic mobility for our communities.
● Pauses additional Child care slots: HOPE commends our state leaders for ensuring that the proposed child care slot expansion is not paused indefinitely. While the final budget funds approximately 11,000 new slots that received tentative awards, it pauses additional slot expansions by two years (2026–27). After two years, additional slots are subject to appropriation.
Latinas are raising more than half of the children in the state and close to sixty-two percent of Latinas also participate in the labor force. Access to affordable and quality childcare is a critical issue for Latinas, significantly impacting our ability to pursue education, maintain employment, and achieve economic stability. We look forward to working with our state leaders to ensure that additional childcare slots are funded in future budget years.
A Look at the Future:
The final budget agreement includes commitments to build economic resilience for future years. This includes a proposal that would require the state to set aside a portion of funds during a surplus so that it cannot be spent until the money is collected. It also suggests putting a constitutional amendment before voters in 2026 to grow California’s main reserve account.
Over the past 20 years, HOPE has offered a Latina perspective on the California State Budget, highlighting key investments and cuts across education, healthcare and social safety net programs. HOPE acknowledges the difficult decisions made by our state leadership this year as California navigated a multibillion-dollar deficit and is committed to working with the Governor and Legislature to ensure future budgets reflect investments that address the unique needs of Latinas.
We encourage all Latinas to continue to track changes to the budget, which we know have a deep impact on access to resources, the provision of services in their communities, and their overall economic well-being in California. You can make your voice heard by submitting public comment to the relevant legislative committees at the links below:
For questions, contact:
Maria Morales, HOPE’s Policy Director at mmorales@latinas.org