Universal Kindergarten, Hollywood Jobs, and No Deficit in California’s $322 Billion New Budget

Race Day Live (Sacramento, CA) – California Governor Gavin Newsom has unveiled a $322 billion budget proposal for the upcoming fiscal year, marking a significant turnaround after two years of budget shortfalls. The proposal, announced Monday, comes without a deficit, a hopeful sign for the nation’s most populous state.

However, the budget serves largely as a placeholder as the state awaits potential financial challenges tied to incoming President Donald Trump’s administration. Roughly a third of California’s budget relies on federal funding, including tens of billions allocated for healthcare services. Newsom must finalize the budget by June, but with Trump taking office on January 20, there’s uncertainty about whether federal dollars will continue to flow as planned.

Federal Challenges Loom

California lawmakers are bracing for potential funding cuts or legal battles over federal policies. The state has already proposed allocating an additional $25 million to the Attorney General’s office to defend against legal challenges, particularly regarding climate policies and immigrant rights. There are also calls for increased funding to provide free legal services to immigrant communities.

One major project at risk is California’s high-speed rail system, designed to connect Los Angeles and San Francisco. The project has faced funding setbacks and delays, including a canceled $1 billion federal grant during Trump’s first term. While President Joe Biden later restored this funding, opposition from Congressional Republicans could pose new threats.

Governor Newsom visited a high-speed rail construction site on Monday to showcase progress and highlight the project’s importance.

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Budget Highlights

Newsom’s budget includes limited new spending but prioritizes several key areas:

• Education: The plan fully funds the nation’s first universal transitional kindergarten program, making schooling free for approximately 400,000 four-year-olds across California.
• Job Creation: It increases the state’s film and TV tax credit to $750 million annually to bring back Hollywood jobs that have shifted to states like Georgia and New York.
• Cost–Saving Measures: Over the past two years, California saved $1.2 billion by eliminating 6,500 vacant state jobs and an additional $3.5 billion by reducing travel expenses and modernizing IT systems.

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Optimism Amid Uncertainty

Governor Newsom expressed optimism about the state’s progress, highlighting investments in education, infrastructure, and efforts to combat homelessness. Still, he acknowledged the challenges ahead.

“We’re walking into headwinds, a radically different moment in U.S. history,” Newsom said. “We need to be prepared.”

Details of the budget proposal will be provided before Friday’s legislative deadline. Newsom, who has two years left in his term, continues to be seen as a potential future presidential candidate.

California, the world’s fifth-largest economy, has weathered significant budget deficits in recent years, including a $46.8 billion shortfall last year. Newsom’s proposal aims to ensure the state is prepared for any uncertainties while maintaining progress on critical programs.

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