State Budget Impact
The COVID-19 pandemic has had a devastating effect on California’s budget, with a shortfall that currently stands at more than $54 billion. Governor Newsom’s May Revision proposes a multi-year approach to closing the gap, including drawing down the rainy day fund over the next three years along with a drawdown on other special reserves. His proposal also includes the use of deferrals for the current year as well as in 2020-21, and reductions to higher education funding.
Most of the initiatives included in his January proposal are eliminated. The Governor also proposes a 10 percent pay reduction for all state employees, which is equal to about two furlough days per month. More extreme reductions are planned if the federal government fails to pass additional relief measures. The Legislature and the Governor will confer to reach agreement on the budget, which must be passed and signed into law by June 30.
Additional background and detail: