Gov. Gavin Newsom plans to unveil his revised proposed 2024-25 state budget at 11 a.m. today — and legislators, advocates and lobbyists are all bracing for likely deep spending cuts to bridge a big deficit. 

His plan will account for updated tax revenue data through April. In his initial budget proposal in January, Newsom projected the shortfall to be $38 billion, though the nonpartisan Legislative Analyst’s Office later put it as high as $73 billion. 

How are revenues working out so far? According to Assembly budget advisor Jason Sisney, general fund revenues at the end of March were nearly $6 billion below projections. April wasn’t looking so great either: Revenue from personal and corporate income taxes were either “barely on track” or below projections, meaning revenue from that month could “come in several hundred million dollars below monthly estimates,” wrote Sisney.

At a California Chamber of Commerce event Thursday, Newsom acknowledged that “we still have a shortfall,” reports KCRA.

• Newsom: “We will manage it, and without tax increases. We’re not just going to try to solve for this year, but also next year. We have to be more disciplined.”

The budget deficit — the second in a row after three years of record surpluses — affects nearly every policy decision legislators make. To get a jump start, Newsom and Democratic legislative leaders announced in March that they aimed to save $12 billion to $18 billion before passing the full state budget in June. A month later, the Legislature and Newsom signed off on the early budget action plan to “shrink the shortfall” by $17 billion. 

The package included cuts to various programs; deferring or delaying spending (such as $1.6 billion set aside for employee pay and $1 billion for transit infrastructure); and increasing revenue or borrowing, including a $4 billion tax expansion on health plans.

Quick scheduling reminder: The Legislature must pass a budget by June 15 or members won’t get paid. Lawmakers and Newsom then have until July 1 to agree on a final 2024-25 spending plan. Budget negotiations, however, can last all the way through September with trailer bills — follow-up proposals that iron out specific programs in the main budget. 

If you’re a budget nerd, or even if you aren’t, you can watch the governor’s presentation on his X, Facebook and YouTube pages. 

And if you’re feeling really wild, you can play an updated version of CalMatters’ trademark “Newsom Lingo Bingo.”

After months of debate that pitted policymakers, industry groups and environmentalists against one another (not to mention consumers), the California Public Utilities Commission unanimously voted Thursday to allow the state’s largest utility companies to charge customers a new monthly fixed fee, reports CalMatters’ Ben Christopher.

Most customers will be charged $24, but lower income households will see fees of either $6 or $12 a month. Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric will also be required to offset the fixed fee by lowering usage rates, with savings of between 8% and 18%.

As part of the new pricing structure, people who use less electricity will pay a bit more because of the monthly fee, while those who use more electricity will save some money due to lower usage rates. The rationale behind approving the billing change is to curb the state’s electricity rates as California winds down its dependency on fossil fuels, and leans towards electrifying homes and vehicles.

• Alice Reynolds, utilities commission president: Customers “will be better off financially if they electrify — whether that’s purchasing an electric vehicle or switching out a gas appliance with an electric one.”

Still, backlash to the action came swiftly.

Sen. Brian Dahle, a Redding Republican and vice chairperson of the Senate energy and utilities committee, called the hike “unbelievable.” Senate GOP leader Brian Jones of San Diego also said it was “unfair and unjust,” and raised concerns that the utilities commission could eventually raise the new fee higher.

Assemblymember Jacqui Irwin, a Thousand Oaks Democrat, tried to roll back the fixed charge. That bill was amended this week to prevent the fixed charge from rising more than inflation and to repeal it entirely in 2028. In a statement Thursday, Irwin said the amended bill would treat the new fee as a “pilot project” and make sure the utilities commission doesn’t hurt low- and middle-income consumers already struggling with high utility bills. 

Another proposal to reduce rates is in the “suspense file” and could be killed next week. Authored by Democratic Assemblymember Al Muratsuchi of Torrance, the bill would require the state’s utilities and energy commissions to create a group to oversee a fund to lower electricity rates or help pay for residents’ utility bills.

Read more about the rate change in Ben’s story.

Speaking of California’s governor, he’s going to stay busy, after finishing up his budget reveal today. 

A quick roundup of Newsom news:

Going on global stage: Next week, he’s off to the Vatican to meet Pope Francis and other leaders to tout California’s efforts on climate change and urge others to do more before it’s too late. Newsom also did a climate-focused trip to China last October, with a quick stop in Israel after the Hamas attack.

Writing another book: Newsom is working on his third book, a memoir, which could be yet another sign of his national political ambitions, the Los Angeles Times reports. Newsom also wrote an autobiographical children’s book about his struggles and triumphs over dyslexia. 

Promotional tours for books can be a good way for elected officials to build their name recognition. But they can also go horribly wrong, as South Dakota Gov. Kristi Noem has shown as she tries to clean up the controversy over shooting her own puppy. 

Losing a close aide: Newsom’s top policy adviser plans to decamp in late June, Politico reports. Jason Elliott, who has been with Newsom going back to his days as San Francisco mayor, plans to build his own consulting business. 

• Elliott, to Politico: “We’ve been through more campaigns, ballot measures and recalls, than I can count. We’ve been through COVID. We’ve been through the housing and homelessness crisis. We’ve been through wildfires. We’ve been through political ups and downs.”

California Voices

CalMatters columnist Dan Walters: San Francisco Unified’s budget woes are not the only example of fiscal mismanagement in California public schools.

The state’s community colleges and businesses are preparing workers for the “blue ocean economy,” write Sonya Christian, California Community Colleges chancellor, and Terry Tamminen, president and chief executive officer of AltaSea.