Today, California’s politicians started their work for the 2024 session, facing a tight budget and not much money to use. At the same time, people asking for peace in Gaza led to a quick stop in their meeting.
They need to decide how to spend the limited funds on health care, housing, education, and the environment. They’re trying to figure out how to deal with a $68 billion budget shortfall for the 2024-25 year. They’re thinking about cutting $10 billion in spending just once and using $24 billion saved up.
Jesse Gabriel, a Democrat from Encino and the new head of the budget committee, said this shortage of money will affect all their decisions. He emphasized the need to make hard choices and focus on helping those in need.
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This means keeping support for social services, schools, and programs for the climate and homelessness, he explained.
Nancy Skinner, another Democrat leading the budget in the Senate, aims to reduce spending without hurting people. She suggests pausing new projects not yet started. It’s not certain if this plan will cover the shortfall, as similar tactics were used last year to address a $30 billion deficit.
Governor Gavin Newsom will share his budget ideas soon, having previously turned down a call for an emergency session on the budget. His team hasn’t commented further.
Toni Atkins, leaving her leadership role in the Senate, anticipates both delays and cuts in spending, warning against expecting any new spending.
The deficit partly comes from California’s tax system, which depends a lot on the wealth of the richest, leading to unpredictable income for the state.
The state had a huge surplus thanks to high earnings and federal aid during the pandemic. But, increased interest rates and other factors have now reduced state income.
This year’s deficit is the biggest yet, but California is better prepared than before, thanks to savings. Still, there’s talk of finding more stable ways to get income, though past ideas have not been popular.
“We need structural tax reform,” Sen. Scott Wiener, a San Francisco Democrat, wrote on social media Tuesday. “We need to broaden out our tax base to make it more stable.”
Wiener, speaking through someone else, chose not to say if he plans to suggest new laws on this topic.
Atkins mentioned that any idea to change the system might not succeed, even though many believe changes are needed. She believes the emergency savings fund created after the last big economic downturn will help deal with the budget deficit, reducing the push for new taxes or major tax reforms.
“I’m not hopeful it will happen,” she stated. “But if California can’t get through this crisis, then maybe that could push for change.”
Gabriel is open to considering all ways to fix the budget issue, but hasn’t seen any strong push for increasing taxes.
“Some might suggest and want to discuss it,” he noted. “However, our first action should be to see how we can manage the current financial gap using our savings and other available means.”
The need for budget cuts might cause disagreements within the Democratic Party, which has a strong majority in the Legislature, and among groups that depend on state money. For some Republicans, this is a chance to suggest reductions to programs they don’t support.
For instance, Essayli, a Republican, proposed a bill to stop the recent expansion of Medi-Cal to undocumented immigrants with low income, arguing it’s necessary due to the budget deficit.
This expansion, which just started for adults 26-49 years old, costs $1.2 billion this year and is expected to increase to almost $3 billion next year. Previously, California extended Medi-Cal to undocumented children and, last year, to seniors. Essayli’s proposal would end state funding for these health services for undocumented immigrants. However, Newsom has expressed strong support for the expansion.
Healthcare costs are also set to rise due to gradual minimum wage increases for healthcare workers. This will lead the state to cover some of these higher wages for workers in the University of California and state hospitals, along with rising public healthcare expenses.
But the budget isn’t the only issue lawmakers are dealing with. Other urgent matters include:
The conflict between Israel and Hamas: The state’s involvement is limited, but some legislators are getting involved or feeling pressured by their communities to take a stand. This could mean calling for the release of hostages held by Hamas or pushing for a ceasefire. Right after the Assembly session started, a group of protesters sang to show their support for stopping the conflict in Gaza.
Lawmakers halted the session, calling a break, and left the chamber until Thursday due to what they deemed a disruption. Outside, over 100 demonstrators voiced their opposition, drawing attention to the claim that Californians indirectly support U.S. military aid to Israel with $600 million, urging these funds be redirected to local needs instead.
Wiener and Gabriel, leading the Legislative Jewish Caucus, supported peaceful protest but criticized the interruption. They are pushing for legislation to counter the increase in antisemitism following the Oct. 7 attack by Hamas on Israel.
On retail theft, Carlos Villapudua, a Democrat, is proposing a change to Proposition 47, aiming to address its “unintended outcomes” by adjusting the criteria for felony charges for theft. Despite a special committee formed to tackle retail theft, broader efforts to repeal Prop. 47 have not passed. This issue has gained traction amid concerns over theft, although a report on “organized” shoplifting by a national retail group was withdrawn last year.
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Regarding reparations, a state task force has outlined recommendations for compensating Black Californians for historical injustices, with an estimated cost of $800 billion. Sen. Steven Bradford has proposed creating an agency to manage reparations, but gaining widespread support remains a challenge.
There’s also a focus on artificial intelligence, with proposals to regulate AI use, including in campaigns and contracts involving “digital replicas.” Sen. Steve Padilla introduced a bill focusing on AI standards in state contracts. Last year, a mandate for a review of “high-risk automated decision systems” was passed.
Wildfire insurance remains an unresolved issue, with major insurers pulling back from California’s market. New regulations are in development but may take years to implement.
Lastly, the closing of maternity wards has prompted Akilah Weber to propose a bill for further state scrutiny on such closures and their community impact.
