Governor Newsom Introduces May Revision to the California Budget for 2021-22

This morning, Governor Gavin Newsom presented the May Revision of his proposed 2021-22 budget for California. The $267.8 billion budget, of which $196.8 billion is from the General Fund, included a week of press tours around the state leading up to the announcement of his $100 billion California Comeback Plan, the biggest economic recovery package in the state’s history. Using the state’s projected $75.7 billion surplus and over $25 billion in federal relief, this plan includes comprehensive strategies and major investments to address five of the state’s most stubborn challenges. These strategies include:

• Provide immediate relief for families and small businesses.
• Confront the homelessness and housing affordability crisis.
• Transform public schools into gateways to opportunity.
• Build infrastructure of the next century.
• Combat wildfires and tackle climate change.

The May Revision includes $24.4 billion in reserves, which include: $15.9 billion in the Proposition 2 Budget Stabilization Account (Rainy Day Fund) for fiscal emergencies, $450 million in the Safety Net Reserve, $4.6 billion in the Public School System Stabilization Account, and an estimated $3.4 billion in the state’s operating reserve.

The May Revision continues to pay down the state’s long-term retirement liabilities and reflects $3.4 billion in additional payments required by Proposition 2 in 2021-22 and $7.9 billion in additional payments over the next three years. The improved revenue forecast also allows for the elimination of $2 billion in proposed program suspensions that were delayed at the Governor’s Budget.

Governor Newsom was clear that every budget allocation in this May Revision was made in an effort to achieve the goals outlined in his California Comeback Plan. View Full Update