Governor Newsom’s May Revise: $32B Shortfall, Climate Investments Intact

In May, Governor Newsom released his May Revision for budget year 2023-24, also known as the “May Revise,” with a projected budget shortfall of approximately $32 billion – $9 billion greater than predicted in January. The May Revise maintains the $48 billion in climate investments proposed in the Governor’s January budget without further cuts, but proposes a shift of approximately $1.1 billion in existing commitments for inclusion in a future legislative climate bond, including funding for the following programs: 

• $270 million for Water Recycling 
• $169 million for Salton Sea Restoration 
• $160 million for Community Resilience Centers 
• $60 million Sustainable Groundwater Management Act Implementation 

The May Revise also proposes an additional $290 million above what was proposed in the January budget, for a total of $500 million, to support flood response as follows: 

• $125 million as a flood contingency set-aside to support costs associated with preparedness, response, recovery, and other associated activities related to the 2023 storms 
• $75 million to support local flood control projects, including in communities impacted by recent storms 
• $25 million to expand the scope of the California Small Agricultural Business Drought Relief Grant Program  
• $25 million set-aside in the current year in anticipation of potential disaster relief and response costs associated with recent storms and future flooding 
• $40 million for San Joaquin Floodplain Restoration 

The Legislature and Governor are currently negotiating details of the climate bond, which could potentially provide upwards of $15 billion in climate resiliency funding for various programs and projects, if passed by the Legislature and approved by voters. However, details of the bond are uncertain at this time.  

The Legislature will now discuss and debate the merits of the revised budget and must pass a final budget by June 15. Though many of the details behind the budget are worked out after this constitutional deadline in what are known as budget trailer bills. 

SRYCL will continue to monitor state budget conversations to ensure that California leads with a strong climate budget.