ICYMI: Governor Releases May Budget Revise

On May 12th, Governor Newsom released his  May Revise, which updates his January budget message and takes into account the latest revenue projections. The Governor announced an unprecedented $97.5 billion surplus, which he proposes to use for largely one-time projects and programs. The total budget for FY 2022-23 is a record $300 billion. Due to spending limits, a large part of the surplus must be directed to education and other dedicated funds, leaving around $49 billion that can be directed to other program priorities.

 This updated proposal has been forwarded to the Legislature, which is now holding budget hearings and is required to present a budget package to the Governor on or before midnight on June 15th. By State law, the Governor has twelve working days to sign the budget bill. The bill becomes law upon his signature. 

 In the proposal released in January, $4 billion was included for housing and homelessness programs to be spent over a two-year period. Of the total, $2 billion is targeted to homelessness and $2 billion to affordable housing, with key investments that include:

• $1.5 billion for quick and interim solutions that help people move from the streets into behavioral health shelter and treatment ($1 billion in FY 2022-23 and $500 million in FY 2023-24).
• $500 million for the Infill Infrastructure Grant Program ($225 million in FY 2022-23 and $275 million in 2023-24).
• 300 million for the Affordable Housing and Sustainable Communities Program ($75 million in FY 2022-23 and $225 million in FY 2023-24).
• $500 million in funding to expand the State Low Income Housing Tax Credit Program. An additional $2 billion in funding for affordable housing for college students was included in the January proposal.

The May Revise announcement added $2.7 billion in rental assistance funding to help renters impacted by the pandemic (who submitted applications by the end of March), resulting in total State funding for this program of $8.1 billion. It is projected that 300,000 families will be assisted with these funds, with an estimated 86% that fall into the Very Low-Income bracket (50% or below of Area Median Income adjusted by county and household size). Additional funding will be directed to efforts that help families pay their utility bills and provide health care subsidies.

Additionally, the Governor announced an additional $1.2 billion for housing and homelessness, including:

• $500 million for the conversion of malls and office buildings to affordable housing

• $700 million for crisis response/interim housing ($500 million), Homekey expansion ($150 million), and the CARE Court ($65 million), which is the Governor’s proposal for responding to severe mental health needs of the population

The four State housing agencies—the California Department of Housing and Community Development, the California Housing Finance Agency, the California Tax Credit Allocation Committee, and the California Debt Limit Allocation Committee—have existing funding as well. The total funding for housing in 2022-23 is projected at $9.1 billion, with $9.4 billion available for programs serving the homeless and those at risk of homelessness. This is a total of $18.5 billion committed to housing and homelessness spending. See the list of programs and allocations here.