Gov. Gavin Newsom released his revised budget proposal last week, but this week more details are emerging about how he plans to close the remaining shortfall — now pegged at $27.6 billion (though the nonpartisan Legislative Analyst’s Office is expected to issue a higher deficit number).

To balance the 2024-25 budget, Newsom has proposed dipping into reserves, canceling spending and cutting existing programs. For 2024-25 and 2025-26 combined, he’s calling to cut $19.1 billion in one-time spending plus $13.7 billion in ongoing programs. 

These cuts are provoking the loudest outrage from advocates and legislators, who have been ramping up appeals to protect program funding. 

Wednesday, Democratic legislators including West Covina Sen. Susan Rubio and Moreno Valley Assemblymember Corey Jackson joined members of the Service Employees International Union California and youth advocates at a Capitol rally to push back against potential cuts to CalWORKs, CalFresh and other social welfare programs. 

Newsom proposes to reduce funding for CalWORKs by $272 million in 2024-25, in addition to a nearly $126 million reduction in the program’s mental health and substance abuse services. Funds totaling $31.2 million in 2024-25 to expand the state’s food assistance program could also be delayed.

• Jackson, at the rally: “These cuts to our social safety net are simply not acceptable. … We are not going to balance this budget on the backs of our most marginalized and our poorest residents.”

Some other proposed cuts:

• Internet access: Two million Californians cannot afford high-speed internet access, particularly those from lower-income, Black, Latino, tribal and rural communities. This digital divide could persist as Newsom’s proposal slashes $2 billion from public broadband projects, writes CalMatters tech reporter Khari Johnson. This includes cutting $325 million for projects backed by local governments, tribal governments and nonprofit organizations in disadvantaged communities, as well as $34 million for outfitting rural libraries with high-speed internet.

• Public universities: As CalMatters higher education reporter Mikhail Zinshteyn explains, the University of California and California State University would see a combined $200 million in cuts if the governor’s updated budget plan for next year remains intact. Despite Newsom promising the university systems annual state support through five years totaling $2 billion, the UC would get a $125 million cut and Cal State a $75 million cut in 2024-25. The two systems run 33 universities and enroll around 750,000 students.

Today, many of the same interest groups will be closely watching what happens in the appropriations committees’ “suspense file” hearings, where more than 1,000 bills with new spending attached will either advance or die for the session.

From CalMatters’ Khari Johnson: 

The California Public Utilities Commission has proposed rejecting AT&T’s application to stop providing landlines and other services in areas where there is no other option. 

The telecommunications giant is the “carrier of last resort” for California, an official designation that means it covers most major cities, rural communities, and the land of more than 100 tribal governments. To find out if your home is in that area visit this website.

More than 5,000 public comments were written in response to AT&T’s application. Nearly 6,000 people attended eight public forums held in the past few months. Numerous commenters note that due to inconsistent cell coverage in their area, their landline is their primary means of communication with family, medical providers, and the outside world in the event of an emergency.

No telecommunications companies responded to AT&T’s application to replace it as the carrier of last resort. 

AT&T argued that voice over internet service from cable companies including Cox and Comcast and mobile providers such as Verizon can meet people’s communication needs. The public utilities commission disagrees. So does the administrative law judge who dismissed the application with prejudice in a decision last week. 

• Judge Thomas Glegola: “It is not clear why AT&T filed this application, under existing rules and then attempted to convince the Commission that it should ignore its rules, based on flawed and erroneous assertions…”

In a statement to CalMatters, an AT&T spokesperson said that they’re disappointed with the ruling and that robust competition today means the monopoly rationale behind the designation no longer applies.

The decision is not final until the utilities commission votes at a June 20 meeting, when the commission will also consider changing rules for carriers of last resort.

Plans to renovate the state Capitol annex — which houses offices for the governor, legislators and other state officials — hit another roadblock to meet the 2025 construction goal.

An appeals court ruling published Wednesday says that the state cannot move forward with the $1.2 billion project until it follows its own law and completes an adequate environmental impact report. 

Some background: In 2016, the Legislature approved plans to modernize the building with more space for staff, disabled access and updated electric and plumbing systems. But since its near complete demolition last year, construction has slowed. Save Our Capitol!, the California Preservation Foundation and other groups argue that the project will fell historic trees, burden taxpayers and restrict the public’s use of the west side of the Capitol. A lawsuit accusing the state of not providing sufficient analysis of the project’s environmental and historical impacts has been making its way through the courts.

Last year, a lower court allowed demolition to proceed — but prohibited construction until the state addressed concerns that parts of the project, such as a planned visitor center, did not comply with the California Environmental Quality Act. The state then issued a revised environmental impact report in an effort to recertify the project, but the latest ruling found once again that the state is falling short. 

Ride-share drivers and other gig workers are front and center before California’s highest court next week. What’s the argument about and why does it matter? Find out from CalMatters economy reporter Levi Sumagaysay.

California Voices

CalMatters columnist Dan Walters: How did California’s record budget surplus turn into a deficit in just two years? Newsom offers answers, sort of.

CalMatters columnist Jim Newton: Candidates running for Los Angeles County district attorney are selectively using crime data in their appeals to voters.