HOPE’s Response to the California Governor’s 2024–2025 Budget May Revise

HOPE Latinas
8 min readMay 21, 2024

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Photo of the State Capitol

On May 10, California Governor Gavin Newsom released his May Revision for the 2024–2025 budget, updating his January proposal with new strategies to address the state’s deficit based on the latest economic forecast. The Governor now projects a $201 billion spending plan, accounting for a $27.6 billion deficit.

In his May Revise, the Governor proposed a series of new strategies to address that remaining deficit, notably by reducing delays/deferrals and converting some proposed delayed funding in January to cuts altogether.

HOPE acknowledges the Governor’s efforts in navigating the fiscal challenges facing our state and commends his commitment to preserving key programs like the Health care for all expansion which we know addresses severe health inequities for our communities.

However, we are deeply concerned about the absence of any funding for Cal Grant Reform and cuts to critical supportive services and behavioral health programs that support our workforce and youth behavioral health infrastructure. Another worrisome concern is the indefinite pause to the expansion for childcare slots and the elimination of the In-Home Supportive Services program benefit for undocumented Californians.

As we strive for fiscal balance, we must not lose sight of our duty to prioritize equity-driven programs that safeguard our most vulnerable communities. HOPE looks forward to continuing to work with the Governor and the Legislature to ensure that the final budget aligns with our shared values and adequately protects Californians in need.” — Helen Torres, CEO of HOPE

Read our full summary of the May revise below:

On May 10, the Governor released his May Revision for the 2024–2025 budget, updating his January proposal with new strategies to address the state’s deficit based on the latest economic forecast. The Governor now projects a $201 billion spending plan, accounting for a $27.6 billion deficit.

In January, the Governor projected a $38 Billion deficit, $17.3 billion of which was addressed by the Early Action Package signed last month, leaving $20.6 billion to address. The May revision identified an additional $7 billion deficit, which when combined with the leftover January estimates, leaves a $27.6 billion deficit.

In his May Revise, the Governor proposed a series of new strategies to address that remaining deficit, notably by reducing the use of delays/deferrals and by converting some proposed delayed funding in January to cuts altogether.

Closing the remaining $27.6 Billion Gap:

Tapping into Budget reserves: The May Revision maintains the withdrawal of approximately $12.2 billion from the Rainy Day Fund, as well as $900 million from the Safety Net Reserve, as outlined by the Governor’s proposal in January. However, the May Revision spreads the use of the rainy day fund withdrawal over two fiscal years, utilizing $3.3 billion in the 2024–25 fiscal year and $8.9 billion in the 2025–26 fiscal year. This action will assist in balancing the budget through the 2025–26 fiscal year.

Delays or Deferrals: The January budget delayed and deferred nearly $7.2 billion in funding for multiple items and spread it across the three-year period, beginning in 2025–26. The May Revision minimizes the use of delays and some delays proposed in January have been changed to reductions. There are limited exceptions in which funding is spread over a multiyear period.

Spending cuts: The January budget proposed $8.5 billion in spending reductions across various programs. The May revise proposes additional spending cuts, bringing the total to $14.6 billion.

Revenue/Internal Borrowing: The may revise includes additional support from revenue sources and borrows internally from special funds, bringing this total to $7.4 billion.

In navigating California’s fiscal deficit, Governor Newsom has demonstrated commendable leadership in crafting a balanced budget, yet, amidst these challenges, we must acknowledge the delicate balance of fiscal prudence and social responsibility. Our budget reflects our values as a state and it’s imperative that we prioritize investments in programs that address critical equity gaps in our communities. A balanced budget should not be achieved at the expense of cutting vital services that uplift those most in need.

The sections below highlight cuts of concern, as detailed in the Governor’s May Revise on 5/10/24:

Higher Education

Middle Class Scholarship: The May Revision reduces funding by $510 million General Fund in 2024–25 and ongoing for the Middle Class Scholarship. Combined with a technical adjustment, $100 million General Fund ongoing would remain for the program.

Learning Aligned Employment Program: The May Revision reduces funding for this program by $485 million General Fund one-time, reflecting the balance of unspent funds.

Golden State Teacher Grant Program: The May Revision reduces support by $60.2 million General Fund one-time. Combined with a technical adjustment, $50 million one-time support would remain.

Latina Futures 2050 Lab: The Governor’s May Revise proposes pulling back $13.7 million for the Latina Futures 2050 Lab spearheaded by the Chicano Studies Research Center in partnership with the Latino Policy and Politics Institute. These one-time funds were allocated in the 2022–23 budget cycle. 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. This is a cut of concern, since eliminating funding at this critical point would not only undermine efforts to advance gender equity for the plurality of women of color in California but would set the state on a pathway that fails to leverage the collective potential and power of one of our greatest assets.

Cal Grant Reform

The 2022 Budget Act included a trigger that anticipated certain programs expenditures would be included in the 2024 Budget Act if General Fund resources reflected in the 2024 May Revision could support ongoing increases over the multiyear forecast. The Governor cited that due to the projected multiyear negative projections, the Cal Grant Reform Act changes are not included in the May Revision.

HOPE maintains that Cal Grant Reform must remain a critical priority in this year’s budget, especially as a key to building California’s pathway to economic growth and recovery from the current deficit. In the past several months and in recognition of this year’s difficult budget picture, the Cal Grant Reform Coalition has worked with the California Student Aid Commission to identify a phased-in approach to Cal Grant Reform, ensuring that the reform will not result in any new ongoing costs in California this year.

In the upcoming weeks, and as a member of the Cal Grant Reform Coalition, HOPE will continue working with the Legislature and the Governor to include this phased-in plan in the final budget package and uphold the promise of Cal Grant Reform. Our students’ futures and California’s prosperity can’t be paused during tough budget years. They depend on making higher education more accessible to ensure our workforce is prepared for tomorrow’s challenges, and we look forward to working together to see that mission realized.

Learn more about Cal Grant reform here

Submit a letter to the Legislature on Cal Grant Reform

Health

Cuts to Healthcare Workforce: The May Revision reduces General Fund expenditures of $300.9 million in 2023–24, $302.7 million in 2024–25, $216 million in 2025–26, $19 million in 2026–27, and $16 million in 2027–28 for health workforce initiatives adopted in the 2022 Budget Act, including programs for community health workers, nursing, social work, residency programs through the Song-Brown Healthcare Workforce Program, the Health Professions Career Opportunity Program, and the California Medicine Scholars Program.

Behavioral Health Workforce: The May Revision also eliminates expenditure authority from the Mental Health Services Fund of $189.4 million in 2024–25 for behavioral health workforce programs previously proposed for delay in the Governor’s January budget.

Behavioral Health Continuum Infrastructure Program (BHCIP): The May Revision reduces General Fund expenditures of $450.7 million for the Behavioral Health Continuum Infrastructure Program (BHCIP) in 2024–25, and reduces General Fund expenditures of $132.5 million in 2024–25 and $207.5 million in 2025–26 for Behavioral Health Bridge Housing (BHBH).

Children and Youth Behavioral Health Initiative: The May Revision reduces General Fund expenditures of $72.3 million in 2023–24, $348.6 million in 2024–25, and $5 million in 2025–26 for school-linked health partnerships and capacity grants for higher education, the behavioral health services and supports platform, evidence based and community-defined evidence practices grants, the public education and change campaign, and the youth suicide reporting and crisis response pilot.

HOPE has called for the need for targeted workforce investments that increase the representation of Latinas in the behavioral 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 or equipped to support the needs of Black women and Latinas. 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.

Additionally, HOPE has been a strong advocate for increasing behavioral health services for Latinas and other underserved communities across the State. Latinx and Black Americans, young people, women, and those with low incomes are most at risk of mental health challenges and are the populations most burdened by the social determinants of health. HOPE is strongly concerned with cuts to these workforce programs and behavioral health infrastructure which have the effect of limiting access to culturally competent, quality health care for our diverse communities.

Human Services

Cuts to CalWorks: The May Revision makes additional cuts to services for families in the CalWORKs program, including eliminating $126.6 million in total funding for mental health and substance use disorder treatment and reducing the CalWORKs Home Visiting Program by $47.1 million ongoing.

Indefinite pause to new child care slots: The May Revision indefinitely pauses the planned expansion of over 200,000 new subsidized child care slots, limiting the expansion to approximately 119,000 slots.

IHSS Program cuts for undocumented adults: The May Revision maintains the expansion of Medi-Cal to all Californians regardless of immigration status, but eliminates the In-Home Supportive Services (IHSS) benefit for beneficiaries in this population at any age.

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 and IHSS. 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. 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. HOPE is concerned with cuts to the IHSS program for undocumented adults in California, which would have the effect of eliminating home care services for thousands of Californians with disabilities and seniors. This will result in driving our community further into poverty or requiring the state to spend additional funds on nursing home costs.

For questions, contact:

Maria Morales, HOPE’s Policy Director at mmorales@latinas.org

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HOPE Latinas

HOPE is a nonprofit, nonpartisan organization committed to ensuring political and economic parity for Latinas through leadership, advocacy, and education.