California Governor Gavin Newsom released his 2024-2025 budget proposal on Wednesday, which accounts for an estimated $37.86 billion deficit. The plan proposes covering tapping $13 billion from reserves while trimming $8.5 billion from programs—including a $1.2 billion cut to housing programs around the state.
“Thanks to the record reserves we have built up and a commitment to fiscal discipline over the years, our state is in a strong position to close this shortfall while protecting key priorities and programs that millions of Californians rely on,” Newsom said in a press statement. “This balanced budget plan keeps California on firm economic footing while continuing our work to tackle homelessness, keep communities safe, expand access to high-quality education, overhaul behavioral health care and fight climate change. I look forward to partnering with the Legislature to meet this moment with a balanced approach that meets the needs of Californians and safeguards our state’s future.”
Proposed housing cuts include eliminating $300 million from regional planning grants, $250 million for building and preserving multifamily housing and another $250 million from a program to acquire and rehabilitate properties at risk of foreclosure, according to the Associated Press.
The Governor’s office says that Newsom has advanced a multi-year $15.3 billion plan to address homelessness—more than ever before in state history. The new budget proposal maintains billions of dollars for an all-of-the-above approach including $400 million for encampment resolution grants and $1 billion for Homeless Housing, Assistance and Prevention program grants.
However, the proposal does delay $260 million in grants to cities and counties for efforts to tackle homelessness, pushing the spending to 2025-26.
In response to the proposed budget, the California Association of Realtors released a statement, reading: “Housing availability and affordability are closely tied to state revenues and the economic health of California. First-time and first-generation homebuyers face the most significant barriers to homeownership given high costs and lack of inventory. We thank Gov. Newsom for his proposal to address the projected state budget deficit. We look forward to continuing to work with Gov. Newsom and the state legislature on forward-thinking policy that, while recognizing the fiscal challenges the state faces, will create a pipeline of entry-level market rate housing that begins to address the state’s housing supply and affordability crisis.” —CAR President Melanie Barker.
Photo courtesy of the Governor’s office