Statement from Pete Manzo, President & CEO, United Ways of California

Wednesday, January 10, 2024

Today Governor Newsom presented a 2024-25 Budget Proposal which underscores notable budget challenges for California in the year ahead. Despite the state’s current budget deficit, our economic climate is strong, and we have numerous resources to address these challenges and protect the meaningful progress we have made for Californians — particularly for our community members who continue to struggle to make ends meet. The state’s total proposed investment is $291.5 billion, and the estimated deficit, now at $37.86 billion, is fortunately significantly lower than previously projected by the Legislative Analyst Office. Our economy is clearly showing signs of recovery and growth at a more rapid pace than previously anticipated. This outlook, paired with decreasing inflation rates and robust state savings designed to help address deficits, gives us reason to be hopeful that California can weather this fiscal challenge and quickly refocus back on investing in policies that work best for all Californians. 

We are thrilled that Governor Newsom specifically highlighted the impact of the state’s continued commitment to refundable tax credits like the California Earned Income Tax Credit and the Young Child Tax Credit as critical to our state’s “economic dominance.” We only have to look at the decrease in child poverty rates due to the temporarily expanded federal Child Tax Credit during the Pandemic — and conversely the negative results of its expiration — to understand the direct critical benefit investments in tax credits make for California’s families. 

As we note in our latest Real Cost Measure study, one in three households in California (34%, over 3.7 million) do not earn enough to afford a decent standard of living. Further, of those struggling households, 97% have at least one working adult. We cannot deny that Californians are doing what they can to build a better future for themselves, their families, and their communities. It is now the responsibility of policymakers to ensure that the state meets our residents where they are with policies and investments that we know work. Governor Newsom’s commitment to targeted tax credits for families with low incomes remains a nation-leading investment, and we enthusiastically look forward to what more we can do as a state to bolster programs that put cash into household budgets. 

Protecting previous investments in education, health, and social services will be critical as we continue to prioritize the well-being of our California families. We are deeply appreciative of the Governor’s efforts to maintain the recent expansion of Medi-Cal coverage, making California the first state in the nation to provide coverage to all Californians, regardless of immigration status. The California United Way Network has long championed this policy expansion, and we’re proud that Medi-Cal will remain accessible to all.

Governor Newsom’s budget proposal also seeks to protect investments in:

• • Community Schools: Maintaining the $4.1 billion investment through 2031 for this potentially transformative program.
  • Broadband Infrastructure: Proposing an additional $8.2 million for various K-12 broadband programs to promote connectivity for students. 
  • Housing and Homelessness: With a continued focus on accountability in state housing proposals, the budget maintains its multi-year commitments of $3.3 billion for Homeless, Housing, Assistance & Prevention Grants (HHAP); as well as $2.8 billion for Project Homekey.

In times of budget deficits and economic uncertainties, California must ensure that we do not undo the hard work and investments we have made in policies and programs that uplift our most vulnerable communities. Fortunately, California possesses a robust rainy day fund to help with difficult budget scenarios such as the one we are currently facing, and the Governor is proposing withdrawing $13.1 billion from the budget stabilization and safety net reserve accounts. To prevent future budget cuts, the Administration is looking to delay several proposed investments from the 2023-24 budget as well as pausing new investments. While we understand the need to balance the budget, we urge the Newsom Administration and Legislature to consider investments that strengthen vital partnerships with community-based organizations with trusted relationships with Californians. Specifically, we urge the state to establish a formal partnership with the network of 211 Information and Referral programs and commit to finding ways to build out this critical infrastructure to continue meeting the evolving needs of Californians 24/7. Additionally, we urge the state to establish a program that strengthens the effectiveness of our federal housing voucher programs, while increasing accountability measures to ensure more community members can find and secure attainable housing.

We also urge Governor Newsom and the Legislature to make budget and policy decisions that take into account how households are doing economically, based on the real costs of living informed by localized data, similar to what United Ways of California produces via the Real Cost Measure. This will help craft equity-based investments that demonstrate the greatest impact for Californians across the state. 

In alignment with our commitment to uplifting Californians across the state, the California United Way network looks forward to a legislative and budget process in 2024 that protects the progress we have made together and centers the needs and voices of our diverse communities. 

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