January 9, 2025

On Monday, Governor Newsom held a press conference to preview his January budget proposal for the 2025-26 fiscal year. The initial information shared by the Administration provides only a high-level overview, characterized as “toplines” by the Governor. In a departure from the traditional release of the January state budget proposal, this “toplines” presentation will be followed by detailed information on the state’s fiscal condition and specific program expenditures during a formal presentation by the Department of Finance tomorrow, Friday, January 10. A recording of the Governor’s press conference is available here.

The full budget will be presented by the Department of Finance tomorrow at 10 AM via livestream on the Governor’s YouTube, in compliance with the constitutional deadline to publish a state budget proposal by January 10 annually. Once the Department of Finance releases the complete budget details on their website, CSAC will conduct a comprehensive analysis and share our insights with the county family through our annual Budget Action Bulletin.

What do we know so far?

Components of the Governor’s preview of the proposed 2025-26 state budget of importance for county governments include:

• State revenues are expected to be $16.5 billion more than previously estimated, yielding a balanced budget in 2025-26 (no state budget deficit forecasted at this time). However, this spending plan includes withdrawing $7 billion in reserves from the state’s “Rainy Day” Fund.
• A proposed constitutional amendment measure on the next statewide ballot to change the State Appropriations Limit (also known as the Gann Limit) to increase the cap on reserves in the “Rainy Day” Fund. 
• Launch of a new website regarding accountability metrics for homelessness, housing, and behavioral health.
• In response to a question from the media regarding Proposition 36 implementation, the Governor briefly referenced likely reductions in Proposition 47 savings and the possibility that previously planned prison closures may be reevaluated.

What happens next?

The Governor’s budget proposal kicks off a long process of negotiations that CSAC will engage in through this summer. In the coming weeks, the budget committees in both houses of the Legislature will schedule hearings to discuss the Governor’s proposed plan for the 2025-26 state budget. CSAC will attend these hearings and submit letters to the Governor and legislative leaders detailing how to structure the state budget in the best interests of California’s residents. We look forward to working closely with the Governor and Legislature to ensure the state’s budget plan is fiscally responsible while equipping county leaders with the tools, funding, and flexibility needed to strengthen the social safety net, protect public safety, and maintain essential infrastructure.

How can I engage with CSAC’s budget advocacy?

CSAC is already taking proactive steps to ensure this year’s budget prioritizes the services and programs that Californians rely on most. As county leaders, this is the moment to make our collective voices heard on the issues that matter most to our communities, ensuring our feedback is considered during budget deliberations. Here’s how you can join the effort:

• Contact your legislators to discuss how this budget impacts your county.
• Send a letter from your county to the legislative budget committees.
  • Contact CSAC legislative affairs staff for a template budget advocacy letter after the full budget proposal is released on January 10.
• Provide a quote to CSAC’s Public Affairs Manager, Rachael Serrao, detailing your county’s budget priorities. Send your quote to rserrao@counties.org by EOD Monday, January 13.

CSAC will publish comprehensive updates on the state budget development process in our weekly bulletin. In the interim, please contact CSAC legislative affairs staff with questions about specific policy areas.