Christina DiCaro, California Library Association Lobbyist, sent out the following information today with regard to Governor Newsom’s May Revision of the 2024-2025 State Budget:
“In terms of the May Revise’s effect on public library programs – as of this writing – the impact is still not known. The Department of Finance noted at today’s press conference that a “cut list” of “hundreds” of proposed reductions was to have been released this afternoon. As of 6:30 p.m., that list is still unavailable to the public. While the Governor did release a “Summary” document to the press and public earlier today, it focused mostly on high-level issues. The idea of using a “cut list” this year is a bit unique for the annual May Revise process, as annual reductions are typically spelled out in the Revise “Summary” document.
As he moved through his proposal today, the Governor implored the legislature to begin looking long-term at Budget solutions, such as addressing the Budget as a two-year process, rather than the current one-year process. The Governor reasons that next year he is projecting another $28.4 billion deficit, if the state does not take corrective action. He added, “It is prudent to solve for this year and next year.” The Governor stressed that his focus with the 2024-25 May Revision (and January Budget) would be to protect core services. However, as mentioned, he is also proposing very significant reductions in programs across-the-board that the Governor acknowledged are cuts he did not take lightly and are “initiatives I have championed.” The Governor stressed that he would not entertain new taxes this year and also added that his proposal does not furlough or layoff employees.
May Revision: Libraries
As I reported in January, the Governor’s January Budget proposed clawing back $131 million in library infrastructure grants that the Department of Finance believed were still unspent at that time. However, by late October/early November 2023 the State Library had already begun the process of awarding Round 1 and Round 2 library infrastructure grants. The grant money had been encumbered, and checks were being sent to grant recipients.
During the recent Senate and Assembly Budget Subcommittees where State Library issues were heard, the Department of Finance acknowledged that their Fall estimate was more of a “snapshot in time” and that there was likely not $131 million available to claw back. The DOF noted they would have to adjust their projections accordingly. In fact, in a hearing this week in the Assembly Budget Subcommittee, the non-partisan Legislative Analyst’s Office indicated that they believe there is approximately only $4.9 million in unspent library infrastructure grant funds remaining, which the State Librarian said was due to several factors including: incomplete paperwork by libraries, missed deadlines by applicants, or the inability for the library to meet the local match requirement.
One of the concerns that CLA has had this year is that the State Library awards the library infrastructure grants in multiple rounds of checks, holding approximately the last 10 percent of the grant award funds until the project can prove it is on target for completion. CLA has been worried that the legislature and Governor could try to claw back the “10 percent checks” or any other checks that were pledged but not officially out the door. Tonight, we are hearing rumors that the infrastructure grants “may” be on the so-called “cut list,” but it is unclear if the Department of Finance and Governor are clawing back the $4.9 million in remaining dollars or something larger. Or, are there other library programs that are vulnerable? As soon as I have clarity on the so-called “cut list,” I will report to the field with details.
Additional Highlights From the Governor’s May Revision:
Many items are being shifted to other financing streams, such as moving the State Capitol restoration project to bond financing, or funding $4 billion in energy and climate-related programs out of the state’s existing Cap and Trade fund.
The Governor’s January Budget proposed using $12.2 billion from the state’s reserve account to balance the budget. However, the May Revise adjusts that figure by instead proposing to draw down $3.3 billion in reserves this year to address the deficit, and then drawing down $8.9 billion next year to address the 2025-26 deficit.
The Governor is proposing a total of $15.2 billion in cuts to various programs. The largest cuts seek to capture $3 billion in savings from state government “belt tightening,” which includes $762 million in savings by not filling 10,000 vacant positions.
There are also large cuts to the CalWORKS program and the Children and Youth Behavioral Health Initiative, plus reductions to water storage projects, cuts to state and local public health departments, and finding greater efficiencies in the statewide broadband roll-out program.
The Governor is proposing Budget “trailer bill” language that would address homeowners’ insurance reform, noting that while the State’s Insurance Commissioner and his team have been working hard on the issue, “We need to get a rate ruling package done and we need to do more and move fast.”
Next week members of the legislature will hold Assembly and Senate Budget Subcommittee hearings on the various subject matters contained in the Governor’s May Revision. These legislators will debate the merits of adopting the Governor’s recommendations and/or will propose their own solutions. The legislature has until June 15th to send a Budget bill to the Governor for his consideration. If a “call to action” effort is ultimately needed, CLA members will be given information on how to make a quick call to key legislators.”
