CALIFORNIA – Governor Gavin Newsom,  previewed January 6, a $322.2 billion state budget proposal for 2025-26 that he says is fully balanced with no deficit. 

Newsom outlined the state’s plans to support economic growth, high-paying jobs and career development, and accountability measures to address housing, homelessness, and mental health. 

The news comes after two years of budget shortfalls.

Last year the state had an estimated $46.8 billion budget deficit and in 2023, a $32 billion budget shortfall. 

The full budget release, accompanied by a briefing led by the Department of Finance, is scheduled for Friday, January 10, 2025.

Savings from the elimination of 6,500 government positions

During his statewide California Jobs First tour, Newsom outlined a $322.2 billion proposal that includes $228.9 billion in general fund spending. 

“It includes savings from the elimination of 6,500 government positions, resulting in $1.2 billion in savings over two years, alongside operational efficiencies like reduced travel budgets, printing costs, and IT modernizations that further reduce costs by $3.5 billion,” said the news release.

He says the fully balanced proposed budget projects $16.5 billion in additional revenue above the 2024 Budget Act due to a stronger economy, stock market, and cash receipts. 

$25 million to challenge federal overreach

The proposed budget may be affected by incoming President Donald Trump’s threats to reduce federal assistance to states. 

California lawmakers have already opened a special session seeking up to $25 million for the California Department of Justice (DOJ) to challenge federal overreach in court, and take administrative actions to reduce potential harm.

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