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Newsom’s Revised State Budget Has More Money for Tech

Gov. Gavin Newsom released his revised proposed state budget Friday for the 2023-2024 Fiscal Year starting July 1. It’s larger than his proposed January budget, with more funding for the California Department of Technology — but the estimated budget shortfall is larger, too.

An aerial view of the California State Capitol.
California Capitol Building
California’s estimated shortfall would rise, but so would a major area of technology funding and overall spend itself, in Gov. Gavin Newsom’s May revision of his proposed 2023-2024 Fiscal Year budget.

Newsom unveiled his revised $306.5 billion state budget Friday morning at a press conference and it’s up roughly 3 percent from the $297 billion budget he released in early January. The state’s estimated budget shortfall is up too, however, from $22.5 billion in January to $32 billion. Among the “growing economic risks” confronting the state, which the Governor’s Office outlined in a fact sheet released Friday afternoon, is around $42 billion in scheduled tax receipts that will be delayed until October by delayed tax filing deadlines. The governor’s May revision keeps $37.2 billion in “budgetary reserves.” And, as The Sacramento Bee reported, it would add another $1.1 billion in reductions to $5.7 billion in the January budget via unspent Middle Class Tax Refund monies and other avenues. It would also add to deferred spending and would take out $450 million from reserves.

“We are walking into a budget where we need to maintain our prudence and we need to prepare not just for the short-term but the medium- and long-term,” Newsom said during his remarks. Among the takeaways:

  • The proposed budget for the California Department of Technology (CDT) would rise more than 17.5 percent, from more than $831.2 million in January to nearly $976.9 million, all with rounding. The department’s proposed positions are unchanged from January, at 1,069 with rounding. The proposed May budget would give CDT nearly $3 million more from the General Fund, up from about $408.6 million to about $411.5 million. It’s unclear where the additional money could be spent; Newsom’s January proposed budget called for cutting $21 million from the $50 million in General Fund monies provided to CDT over multiple years for modernization. Among its budget change proposals this year, CDT has sought nine positions and $2.5 million from the state’s General Fund to develop a state digital equity plan. Complete detail on CDT’s proposed budget wasn’t available at press time. CDT Information Officer Bob Andosca told Industry Insider the department does not comment on proposed budgets.
  • The California Department of Motor Vehicles — a linchpin state department whose modernization Newsom has closely followed — would receive less funding than proposed in January if lawmakers approve the governor’s May revised budget. (Per the state Constitution, the Legislature has until June 15 to pass a budget bill.) The DMV would get about $1.45 billion, down from more than $1.47 billion in January. Similar to CDT, there’s no change to its proposed positions at 8,589 with rounding. DMV would get roughly $52.5 million from the General Fund, down from more than $117.8 million in January, but it would get $40 million more from the Special Fund. Any changes to IT initiatives like digital driver’s licenses aren’t yet clear; complete detail on DMV’s proposed budget had also not yet been released at press time.
  • Industry Insider — California will have additional department-level coverage of the revised proposed budget next week as detail becomes available. However, Newsom’s presentation offered some indications of what it may hold. A slide presentation showed the state’s desire for “pulling back on one-time spending.” However, spending on broadband to deploy high-speed Internet to unserved and underserved residents statewide would seem to still be a go. A slide titled “Rebuilding California” indicated “‘Build’ is the goal” and highlighted $180 billion in spending over the next decade in areas including “faster Internet.” Newsom said he also intends to look at reforming permitting and procurement — including reducing paper documentation — and said a legislative package is likely next week.
Theo Douglas is Assistant Managing Editor of Industry Insider — California.