State Budget Preserves Tech Funding, Workers Get RTO Reprieve

Late last week, lawmakers and Gov. Gavin Newsom found the common ground they needed to finalize the state’s budget — a $321 billion spending plan. But getting there was not without drama.

The Friday conclusion of the budget tango also came with an emergency proclamation that gives the state access to the budget stabilization account containing $17.6 billion in reserves. That order cites the Trump administration’s “sweeping tariff policy” and “below trend growth and rising unemployment” as factors behind the state’s budget predicament.

While those issues are certainly contributing factors, the state’s high spending has also drawn criticism. During the negotiations, lawmakers pushed for funding shifts and deferments rather than more painful programmatic cuts.

One product of the negotiations was changes to the California Environmental Quality Act (CEQA), which will ease environmental reviews for a range of projects, including broadband and advanced manufacturing facilities.

The bills at the heart of the move (AB 130 and SB 131), were heralded by prominent Democrats as a means of cutting red tape in the name of boosting affordability.

“These new CEQA reforms are a bold step forward toward tackling the root causes of California’s affordability crisis. The high costs devastating our communities stem directly from our extreme shortage of housing, childcare, affordable healthcare and so many of the other things families need to thrive,” Sen. Scott Wiener, one of the authors, said in a press release. “These bills get red tape and major process hurdles out of the way, allowing us to finally start addressing these shortages and securing an affordable California and a brighter future.”

For state IT the numbers look unchanged from the May revision, which outlined $798.8 million for the California Department of Technology. While this is a far cry from the $3.17 billion allocated in the previous fiscal year, it is a small improvement above the $797.2 million outlined in January’s proposed budget.

In a good piece of news for state workers covered by SEIU Local 1000 (some 100,000 employees), the governor’s return-to-work executive order is getting deferred by another year. Newsom’s controversial callback was a popular idea amongst the businesses in downtown Sacramento, but sources that Insider spoke to in recent weeks said many of the offices were in no shape for a nearly full-scale return to a physical office.

The reprieve from commuting four days a week will last until July 2026.

Deep Dive Resources
The budget bill
Legislature, Governor Reach Budget Agreement