HOPE’s Review of the Governor’s 2024–2025 Budget

9 min readJan 23, 2024

A Latina Perspective on the State Budget

Over the past 20 years, HOPE has offered a Latina perspective on the Governor’s California State Budget. Latinas are nearly 20% of the population of California, representing the largest share (39%) of California women. In their role as mothers, Latinas are raising more than half of the children in the state. Close to sixty-two percent of Latinas also participate in the labor force. In many ways, how Latinas fare helps determine the future of the state, both in terms of their own well-being and the prospects for California’s next generation.

The state budget is a powerful tool that holds the key to equitable education, accessible healthcare, and economic opportunities for our diverse communities. The sections below break down the January budget proposed by Governor Newsom and highlight investments that impact Latinas’ access to education, health care and economic empowerment.

“Latina communities in California thrive when our state budget addresses the unique needs of our diverse population,” said Helen Torres. “HOPE commends Governor Newsom for maintaining key investments in education and healthcare in his 2024–2025 budget, including honoring his commitment to make Health-4-All a reality. We continue to advocate for implementation of the Cal Grant Reform Act and the safeguarding of key safety net and workforce programs that ensure the prosperity of our communities.”

2024–25 GENERAL FUND EXPENDITURES PROPOSED BY GOVERNOR NEWSOM

OVERVIEW: The 2024–2025 State Budget

Governor Gavin Newsom released his proposed 2024–25 California state budget on January 10, projecting a $38 billion shortfall. His $209 Billion spending plan is more optimistic about the state’s fiscal outlook than what had been previously reported by the Legislative Analyst’s Office (LAO) last month, which had estimated that the shortfall would be closer to $58 billion.

The Administration credits the revenue shortfall to two main factors: a significant delay in income tax collections as a result of federal tax deadline extensions, and a substantial decline in the stock market in 2022, which impacted capital gains revenues. Both masked the extent of the revenue decline last year, preventing the Governor and Legislature from adopting solutions to address this shortfall until this fiscal year. Now, the Governor is faced with presenting a budget that accounts for this $38 billion gap, while also adjusting state spending to ensure the State’s continued fiscal stability.

Closing the $38 Billion Gap:

To address this deficit, the Governor is proposing the following:

Tapping into Budget reserves: His proposal draws $13.7 billion in spending from reserves, including $12.4 billion from the Proposition 2 Budget Stabilization Account (the BSA or Rainy Day Fund) and the entire $900 million from the Safety Net Reserve. This would leave an estimated $18.4 billion across these reserves for future use.
Delays or Deferrals: The budget delays and defers nearly $7.2 billion in funding for multiple items and spreads it across the three-year period, beginning in 2025–26, without reducing the total amount of funding through this period.
Spending cuts: The budget proposes $8.5 billion in spending reductions across various programs, with the majority of cuts going towards climate and housing program initiatives.
Revenue/Internal Borrowing: The budget includes $5.7 billion in support from revenue sources and borrows internally from special funds.

The Governor’s proposed 2024 spending plan includes protections for previous investments that help improve economic security and expand access to essential services like health care for marginalized communities — including fulfilling the promise of expanding Medi-Cal to all undocumented adults by January 1, 2024.

Despite the fiscal projections, several legislative and budget leaders are projecting optimism about California’s ability to weather any revenue shortfalls given the state’s previous fiscal prudence in building out reserves. The Governor’s January budget provides the state with the first look at our projected investments for the upcoming fiscal year, much of which can change once we get a more accurate projection of revenue projections following the April tax deadline.

EDUCATION

HOPE commends the Administration for maintaining strong investments in education in the proposed 2024–2025 budget. Latinos make up nearly 55% of California’s K-12 system and as noted in our 2020 Economic Status of Latinas Report are the largest share of each of the student subgroups in the Local Control Funding Formula. Despite this, only 43% of public higher education students in the state are Latino.[1] HOPE strongly supports investments that expand access to higher education and close equity gaps for Latinas and other underrepresented groups in these spaces.

We are encouraged by the following investments proposed in the budget:

Mathematics Framework: The State Board of Education adopted a new Mathematics Framework in 2023, which is designed to help educators align classroom teaching with California’s rigorous mathematics learning standards. The budget proposes $20 million in one-time funds to develop and provide training for this initiative which is expected to be adopted in 2025.
Universal School Meals: Maintains the California universal meals commitment with an increase of $122.2 million in annual Proposition 98 funding, to maintain two free daily meals for all students.
California Cradle-to-Career Data System: Provides a $5 million increase to the Cradle to Career Data System to support the California College Guidance Initiative, bringing the total allocation to $7 million.
Teacher Preparation and Professional Development: The proposed budget includes several proposals intended to support teachers and improve access to the educator pipeline.
Nursing Program Support: An increase of $60 million one-time Proposition 98 General Fund to expand nursing programs and Bachelor of Science in Nursing partnerships to develop, educate, and maintain the next generation of registered nurses through the community college system.

The Cal Grant Reform Act:

In the 2022 Budget Act, California committed to funding the Cal Grant Reform Act in the 2024–2025 fiscal year, should state revenues remain stable. The Cal Grant Reform Act would reshape the existing Cal Grant process with Cal Grant 2 (for eligible community college students) and Cal Grant 4 (for eligible four-year university students). The remodeled program would align eligibility of state-based financial aid with federal policy, eliminate eligibility barriers and target state resources for the most financially vulnerable students, supporting over 150,000 more students.[2]

The 2024 Budget acknowledges the 2022 Cal Grant Reform Act commitment but does not provide funding to implement it. HOPE looks forward to working closely with stakeholders, the Legislature, and the Student Aid Commission on this much needed reform to advance equity in financial aid for all students.

HEALTHCARE

California’s Medi-Cal system covers over 15 million people, and over 50% of those enrolled are Latino.[3] Expanding access to quality healthcare in California is not just a policy initiative; it’s a commitment to the well-being and vitality of our communities. The Governor’s proposed budget protects major health care investments that were established in prior years, including the landmark expansion of Medi-Cal to all income-eligible adults regardless of immigration status. Specifically, the budget includes:

Health 4 All: The Budget maintains $1.4 billion in 2023–24, $3.4 in 2024–25, and approximately $3.7 billion ongoing, to expand full-scope Medi-Cal eligibility to income-eligible adults aged 26 to 49 regardless of immigration status as of Jan 1, 2024. With this expansion, Medi-Cal will be available to all income-eligible Californians.
Covered California: Maintains $82.5 million in 2023–24 and $165 million annually thereafter to support financial assistance for individuals purchasing coverage on Covered California.
CAL-AIM: The Budget maintains approximately $2.4 billion ($811.1 million General Fund) in 2024–25 to support the DHCS CAL-AIM.
Reproductive Health: Maintains $200 million in 2024–25 for the California Reproductive Health Access Demonstration Waiver to support access to reproductive health services.
Behavioral Health Continuum — The Budget maintains over $8 billion total funds across various departments to expand the continuum of behavioral health treatment and infrastructure capacity and transform the system for providing behavioral health services to children and youth. This funding includes the Wellness Coach benefit in Medi-Cal, which will offer wellness education, screening, support coordination, and crisis management services to children and youth in schools and other behavioral health settings.

The budget also includes delays for behavior health programs and workforce investments:

Behavioral Health Bridge Housing Program: Delays $235 million General Fund for the planned for 2024–25 to 2025–26. This program aims to address the immediate housing and treatment needs of people with serious behavioral health conditions who are also experiencing unsheltered homelessness.
Improving the Behavioral Health Workforce: Delays $189.4 million in spending for the social work, addiction psychiatry fellowships, university and college grants for behavioral health professionals, expanding Master of Social Work slots, and the local psychiatry behavioral health program.
Behavioral Health Continuum Infrastructure Program: Delays $140.4 from 2024–25 to 2025–26 for the final round of Behavioral Health Continuum Infrastructure Program grants.

While we understand that delays in fundings are necessary to address the revenue shortfall, HOPE continues to advocate for the importance of investing in workforce development programs, particularly within the health field. 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.[4] HOPE looks forward to seeing the full implementation of these workforce programs for the benefit of our diverse communities.

ECONOMIC SECURITY

Achieving economic security for Latinas in California requires investments that ensure their ability to meet basic needs, pursue opportunities for growth, and withstand economic challenges. We commend the Governor for maintaining his commitment to support California’s small businesses and for fulfilling his commitment to increase childcare slots. In light of the state’s budget deficit, HOPE stands firmly behind the protection of funding for our safety net programs which support our most vulnerable communities. The Governor’s budget includes:

Supplemental Security Income/State Supplementary Payment (SSI/SSP):The Budget includes $3.7 billion General Fund in 2024–25 for the SSI/SSP program, including CAPI. The state-only Cash Assistance Program for Immigrants (CAPI) provides monthly cash benefits to aged, blind, and disabled individuals who are ineligible for SSI/SSP due solely to their immigration status.
Cost of living adjustment for SSI/SSP: The Budget also includes a 3.2-percent federal SSI cost-of-living adjustment and maintains the 9.2-percent SSP increase, which took effect on January 1, 2024. These adjustments raise the maximum SSI/SSP grant levels to $1,183 per month for individuals and $2,023 per month for couples.
Child care: Maintains the prior year commitments to 146,000 new child care slots, and the goal from the 2021–22 Budget Act to serve 200,000 new children by 2026–27.
Small Businesses: The Budget continues the state’s commitment to support businesses and maintain investments made in recent years. The Budget includes a total of $60 million General Fund, comprised of $10 million in savings from 2023–24 and $50 million in new funding in 2024–25, to extend the California Competes grant program for one additional year.

Cuts of concern:

While HOPE commends the Governor for not making severe changes to the provision of basic needs services, like CalFresh and SSI/SSP, we are concerned with the cuts to the Family Stabilization and Expanded Subsidized Employment services within the CalWORKs program, which effectively eliminate both services.

Family stabilization: pulls back $55 million General Fund in 2023–24 and an ongoing cut of $71 million in 2024–25 for family stabilization programs. This program is designed to provide services to families who are experiencing a crisis.
Employment Services Intensive Case Management: pulls back $47 million General Fund beginning in 2024–25 and ongoing for county staff to provide one-on-one assistance to CalWORKs participants requiring exceptional support to overcome barriers to employment.
Subsidized employment: pulls back $134.1 million General Fund in 2023–24 and reduces $134.1 million General Fund in 2024–25 and ongoing. This program provides Welfare-to-Work participants with job opportunities through subsidized employment placement, a connection to the labor force, and job experience needed to obtain unsubsidized employment.

These programs are critical in preventing families from falling into deeper poverty. The poverty rate for Latinas in California was 16.5% in 2021, nearly double that of White women (8.5%)[5] and Latino families are overrepresented among the lowest income levels.[6] By providing essential support, these programs offer a pathway towards economic stability and empowerment. HOPE looks forward to working with the Legislature, the Administration, and other stakeholders to ensure that our final state budget includes investments in programs that support our most vulnerable families.