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May Revision of the 2024 – 2025 State Budget: Reductions in State Operations, but Salaries and Benefits Remain Intact

Posted: May 13, 2024
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Governor Newsom released his May Revise of the proposed state budget on May 10, 2024. With tax revenues coming in below projections over the past few months, the $37.9 billion deficit predicted in January for the 2024-25 fiscal year has now grown to $44.9 billion. Early budget actions taken by the Governor and Legislature in April 2024 reduce this deficit number by $17.3 billion. The May Revise outlines the plan to address the remaining $27.6 billion shortfall.

The May Revise state budget proposes expenditures of $288 billion ($201 billion general fund), which is significantly less than the $310.8 billion budget signed last year. The revised balanced state budget cuts one-time spending by $19.1 billion and ongoing spending by $13.7 billion through 2025-2026.

What does this mean for excluded employees?

Fortunately, there are no proposed cuts to state excluded employee compensation or other pay and benefit items, beyond the elimination of the telework stipend for state employees beginning with the July 2024 pay period. Anticipated increases in excluded employee compensation remain in the proposed budget.

Among the budget reductions are items impacting state operations:

Vacant Positions - The early action budget solutions included departmental budget reductions of $1.5 billion ($762.5 million General Fund) in the 2024-2025 fiscal year for savings associated with 10,000 vacant state positions. The May Revision proposes making the reductions permanent.

Ongoing Reductions to State Operations - The Governor is proposing a 7.95% across-the-board reduction to state government operations beginning in 2024-2025 to nearly all department budgets to save $2.2 billion. The Department of Finance will work with departments regarding the planned reductions which include personnel, operating costs, and contracting.

The Legislature must pass a budget by June 15, 2024. As the state budget progresses, ACSS’ legislative advocates will continue working to protect the interests of excluded employees. ACSS will keep you apprised as the excluded pay plan for the fiscal year beginning July 1, 2024 comes into further focus.

The May Revision summary can be found here: Budget Summary (ca.gov)



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