RSG Solutions

May 13, 2024

By Dawna Morse, Associate

The January 2024 Governor’s Budget totaled $300 billion to address a $37.9 billion shortfall resulting from misaligned revenues and increased expenditures due to the COVID-19 pandemic. The budget aimed to maintain service levels across essential public sectors, including healthcare and education.

However, Governor Newsom’s recent announcement of the 2023-2024 revised budget proposal reduces the overall budget to $285 billion for 2024-2025. This reduction cut various sectors to address the projected budget shortfall and multi-year operating deficits.

The State’s Department of Finance released a detailed budget revision report to outline the proposed changes to the budget. This document provides insights into the specific funding adjustments, including reductions and reallocations across different departments and programs.

For RSG clients, it’s important to note significant reductions in funding for housing and economic development.

  • The budget adjustment cut the Multi-family Housing Program by $325 million, which supports the preservation and construction of permanent and transitional affordable housing, including $75 million from the 2023-2024 program and an additional $250 million proposed for 2024-2025.
  • The complete elimination of the Adaptive Reuse Program reduced the budget by $127.5 million.
  • The complete elimination of the Foreclosure Intervention Housing Preservation Program dropped the budget by another $236.5 million.
  • The January budget proposed, which the May revision carried through, the complete elimination of the Infill Infrastructure Grant program and the Veterans Housing and Homeless Prevention Program.
  • In the economic development sector, the California Jobs First Program will face a $150 million cut over three years, and the $60 million California Competes Grant program will be removed.

At RSG, we specialize in navigating revised budgets and ensuring programs align with the latest fiscal policies and funding adjustments. If you’re looking to understand how these adjustments could impact your organization, reach out today!