California Budget ChallengeAbout Next 10Budget Overview

Budget Basics

Budget Facts

On January 10, 2024, the Governor released his proposed 2024-25 budget and the May Revision will be released in May 2024. The Governor and the legislature spend the winter and spring months finalizing a budget ahead of the deadline on June 15th of each year. The new 2024-25 fiscal year begins on July 1, 2024.

  • More than three-quarters of the state budget goes to "local assistance" programs that include schools, community colleges, CalWORKS families, Medi-Cal doctors, child care providers, and others
  • More than one-fifth of state spending goes to 23 CSU campuses, 10 UC campuses, 34 state prisons, and other recipients of "state operations" dollars
  • Education makes up the majority of General Fund expenditures with 33 percent to K-12 education and 10 percent to higher education in 202-23
  • More than 60 percent of K-12 education funding is spent on direct instruction and the next largest category, instructional support, accounts for 11.9 percent
  • Income taxes account for more than 60 percent of the state's General Fund revenue, an increase from just over 40 percent in 2010 due to the passage of Proposition 30 in 2012 that raised income tax rates for the highest earners (and Proposition 55 in 2016 that extended the tax increase to 2030)

General Facts:

  • The budget must be balanced—estimated revenues must meet or exceed the Governor's proposed spending
  • Any change in state statute which results in any taxpayer paying a higher tax requires a 2/3 vote of each house of the state legislature
  • The state budget is passed as a bill, though it differs from standard bills that change laws in that: it provides the authority to spend money across a vast array of services and agencies for a single year and it move through budget committees on its own timeline
  • Budget-related bills (known as “trailer bills”) generally make the law changes related to the budget bill and moves in tandem with the budget bill as part of a “budget package”

More information from the California Budget & Policy Center: Understanding How the State Budget Process Relates to the Policy Bill Process (PDF)

Budget Process Overview — Key Dates (PDF) from the California Department of Finance

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