Each year the Governor and Legislature work together to pass the state’s budget that determines how taxes will be spent on state-funded programs like education, healthcare, corrections, and human services through the state's General Fund. The California Budget Challenge simulates this process by presenting spending and revenue options to choose from in order to create your own state budget.

Post-Pandemic Impacts:

Following large surpluses in 2021-22 and 2022-23 due to higher than expected revenue and federal COVID relief funds, the state is now facing a projected deficit of $32.5 billion in 2023-24 following the May Revision. This is a result of lower-than-expected General Fund revenue and the expiration of the state and national COVID emergency orders.

Balance the Budget:

The Governor and Legislature are proposing a number of one-time and ongoing spending increases and decreases to maintain funding for long-standing state priorities—such as healthcare, housing, homelessness, and education—while still closing the deficit in 2023-24. The California Constitution requires the state to pass a balanced budget, so changes have to be made to close the gap. Total budget solutions proposed in the May Revision (including those maintained from Governor’s budget) are: $15.1 billion in spending reductions and delays, $9.1 billion in cost shifts, $3.7 billion in revenue increases and shifts, and $450 million in reserve withdrawals.

Getting Started:

The pie charts below represent the breakdown of state spending and revenue as presented in the Governor’s revised 2023-24 budget, with new spending and any revenue proposals stripped out to present more of a baseline starting budget, leaving you with a starting deficit of $32.5 billion. Options are presented that allow you to allocate additional funding for one-time or ongoing purposes, or cut existing funding. There are also options to raise or cut taxes. For ongoing spending options, the ongoing cost is included in the option text.