Assemblymember Marc Berman
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__SALUTATION__

In a few days, Governor Newsom will sign the on-time, balanced 2023-24 state budget that protects and expands core ongoing programs in education, health care, human services, public safety, wildfire protection, and housing. I wanted to let you know about some of the highlights and address some of the questions and concerns I’ve received over the last few weeks.

First off, the budget situation is not nearly as dire as has been portrayed in some news reports. In fact, this year’s budget includes an 8% cost-of-living-adjustment (COLA) for K-12 education and community colleges, as well as a 5% COLA for the University of California (UC) and California State University (CSU) systems. This funding supports 12,000 more spots for California students at UC and CSU. The budget further strengthens our global leadership combatting climate change by prioritizing clean energy projects that will preserve our environment for generations to come.

You’ve probably seen headlines emphasizing that California’s finances have swung from a $100 billion surplus last year to a $30 billion deficit this year, and you might have wondered to yourself “how did that happen?!?” Needless to say, it’s a lot more nuanced than the headlines make it seem.

California’s Budget that we passed last summer was the biggest budget ever. The stock market was soaring and companies were hiring a lot of new workers, and therefore income and capital gains taxes that make up roughly two-thirds of our general fund revenue were higher than they’d ever been. But we knew that it wouldn’t last…and it hasn’t.

It’s important to note, however, that even with the projected revenue decline from last year’s record-breaking levels, this is still the second biggest budget in state history.

We knew that the massive revenues from 2021-22 were not the new normal. That is why the Legislature allocated the vast majority of last year’s surpluses to one-time purposes (such as repairing our infrastructure), temporary spending phased in over several years, and maxing out our budget reserves.

After a decade of working to restore the State’s finances after the Great Recession, California has an estimated $37.8 billion in reserves and over $100 billion of cash balances in the state treasury – funds that will allow us to protect core services during tough fiscal times in the future.

A state stress test study released late last year by Moody’s Analytics found that California is the fourth most prepared state in the country “to weather an economic slump without having to resort to severe spending cuts or tax increases.” That is exactly what we are doing with the new budget. The 2023-24 budget will protect our progress by addressing revenue shortfalls while protecting investments in core programs that were made over the last 10 years.

While there was less funding available than in past years for local projects, I was proud to secure $3.5 million for projects in my district that my constituents will benefit from for decades to come. This includes $2.5 million for farmworker housing in and around Half Moon Bay, which is a top priority of mine after the mass shooting earlier this year, as well as funding for disability access and emergency services projects in Campbell and Los Altos.

As always, please contact my office if you have questions or if I can be of assistance.

Sincerely,

Signature
Marc Berman
Assemblymember, 23rd District

 

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Capitol Office:
State Capitol
P.O. Box 942849
Sacramento, CA 94249-0023
Tel: (916) 319-2023
Fax: (916) 319-2123

District Office:
721 Colorado Avenue, Suite 101
Palo Alto, CA 94303
Tel: (650) 324-0224
Fax: (650) 691-2120