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

Governor Newsom presented a 2025-26 Budget Proposal which projects a modest budget surplus of $363 million on total expenses of $322.3 billion, including $228.9 billion in general fund spending and an estimated $16.5 billion in additional revenue compared to previous projections made by the Legislative Analyst’s Office.

We are pleased to see there are no meaningful proposals to cut funding for core programs after two years of budget deficits, but rather there are plans to refocus and prioritize investments that support the health, education, and financial stability of all Californians and support resilient communities across the state.

Californians have been doing all they can to build a better future for themselves, their families, and their communities, but unfortunately, one in three households in California (34%, over 3.7 million) do not earn enough to afford a decent standard of living, as we document in our biennial Real Cost Measure study. Of those struggling households, 97% have at least one working adult. Policymakers must continue to ensure that the state meets our residents where they are with policies and investments that we know work. 

We appreciate that Governor Newsom specifically highlighted commitments to support children and families through the following:

• Proposition 2: $10 billion Education Bond – The Kindergarten through Grade 12 Schools and Local Community College Public Education Facilities Modernization, Repair, and Safety Bond Act of 2024
• Proposition 4: $10 billion Climate Bond – The Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024
• Statewide Diaper Initiative, which will provide a three-month supply of diapers at no cost to California families with newborn babies
• Full implementation of Universal Transitional Kindergarten (TK) 
• Screening for risk of reading difficulties for all kindergarten through second-grade students, increasing early identification and support
• The disbursement of implementation grants to Local Educational Agencies for the California Community Schools Partnership Program, which will support more than 2,000 public schools

We appreciate the Governor’s office and the Department of Finance acknowledging the important role immigrant communities play in our economy, in the context of threats of mass deportation from the new incoming federal administration and anticipated uncertainty around federal policy implications, especially around our immigrant communities. As the California Budget & Policy Center recently highlighted, “California’s undocumented residents contribute nearly $8.5 billion in taxes, playing a crucial role in supporting public services while remaining excluded from essential programs.” As uplifted in today’s budget briefing, restrictive federal immigration policies could lead to labor shortages and result in inflation, which could further negatively impact households already struggling to make ends meet. 

Protecting previous investments will be critical as we prioritize our California families’ well-being. We applaud the Governor’s and Legislature’s efforts to support the health of Californians regardless of immigration status through $188.1 billion in Medi-Cal investments in 2025-26. Per the Governor’s Budget Proposal, Medi-Cal is projected to cover approximately 15 million Californians in 2024-25 and 14.5 million in 2025-26—more than one-third of the state’s population. 

As the world’s fifth-largest economy, California has the means to ensure all residents share the benefits of economic prosperity. We urge the Newsom Administration and California Legislature to prioritize investments that uplift our most vulnerable communities and strengthen vital partnerships between the state and community-based organizations serving those communities. Specifically, we call on the Legislature and Governor to increase vital 211 investments and commit to finding ways to build out this critical infrastructure to continue meeting the evolving needs of Californians 24/7. Additionally, we highlight the need to bolster investments that put cash directly into families’ hands—especially the California Earned Income Tax Credit (CalEITC), Young Child Tax Credit (YCTC), and access to Free Tax Preparation Assistance & Education and Outreach programs—which critically support households with low incomes.

We are committed to uplifting Californians across the state. California United Ways look forward to working with the Governor and legislators in a legislative and budget process in 2025 that protects the progress we have made together and centers the needs and voices of our diverse communities. Together, we can build an equitable California where every individual has the resources and opportunities they need to thrive. 

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United Ways of California improves health, education, and financial stability for low-income families and individuals by coordinating the statewide advocacy and community impact work of California’s United Ways.