2024-25 Budget Highlights and Analysis Fall Update

Executive Summary

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Overall Budget

Continues Long-Term Trend of Spending Growth and Deficits. The 2024-25 budget would spend nearly $212 billion General Fund, a decline of about $12 billion from the prior year. Despite the deficit, the budget would still spend $16 billion General Fund more than the level seen just two years ago in 2022-23. The three future years included in the forecast would continue that long-term growth trend in spending, which would outpace revenues for years into the future. The budget is purportedly balanced through 2025-26, but only precariously so on paper using largely short-term solutions. The "balance" also ignores billions in higher spending that is likely to occur through the new health facility wage mandate or November ballot propositions. The budget puts California on pace to create operating deficits of $14 billion in 2026-27 and $18 billion in 2027-28, as shown in the chart below, even without a decline in revenue or further increase in spending.

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Governor's Deficit Lower than Nonpartisan Estimate. The 2024-25 budget purportedly solves a deficit of $47 billion, though the nonpartisan Legislative Analyst's Office (LAO) points out that the Governor preemptively removed some solution proposals from that deficit calculation, even though the Legislature had not yet approved those actions. Thus, the Governor's accounting artificially reduces the size of the deficit. After adding back those precounted solutions, and thus returning to the typical accounting approach, the deficit increases to $71 billion.

Spending Potentially Undercounted. In addition to the unusual accounting, the Governor undercounts spending for the newly implemented health care facility wage mandate authorized by SB 525 (Durazo, 2023) by potentially $2 billion. The budget also does not address potential spending in the low billions of dollars that voters may approve on the November 2024 ballot for bond measures or the health care tax redirection initiative.

Budget "Solutions" Almost Entirely Short-Term. Thedeficit solutions in the enacted budget total nearly $71 billion through 2024-25, after adding back precounted solutions. Unfortunately for the long-term sustainability of the state budget, only 8 percent of the solutions are ongoing. The remainder include short-term solutions that affect one to three years of spending, or potentially require higher spending in the future to pay back borrowing. Only one-third of the solutions are characterized as spending reductions. The $71 billion solutions package includes the components summarized in the chart below.

The largest individual items include use of general reserves ($6 billion), various tax increases on businesses ($6 billion), tax increases on managed care plans ($5.6 billion), and an across-the-board reduction to state operations ($2.2 billion). Gimmicks included in the solutions package are a one-day delay in state payroll from June 30, 2025, to July 1 ($1.6 billion), which would not pass muster in any private corporation, and the use of a previous pension debt reduction payment to offset current state pension contribution ($1.3 billion).

An additional $27 billion in budget solutions would occur in 2025-26, addressing the deficit for that year, at least on paper and before accounting for the potentially higher spending described above. These solutions that are either carryforwards from solutions adopted in 2024-25 or new solutions for 2025-26. The largest solution for 2025-26 is the withdrawal of $7 billion from reserves.

Reserves Used While Program Expansions Continue. The budget would use $6 billion from General Fund reserves in 2024-25, including a withdrawal of $4.9 billion from the state Rainy Day Fund. The 2025-26 budget would withdraw another $7 billion from the Rainy Day Fund, helping to avoid a deficit in the forecast for that year. The state continues to increase spending, though, including through new or recent discretionary program expansions that are still ramping up. This indicates that the budget is using reserves to expand programs, not merely maintain existing programs, in defiance of common sense fiscal management. The resulting deficits mean that reserves would be wiped out in 2026-27.

Californians Have Taken Billions in Tax Dollars to Other States. The nonpartisan LAO evaluated the tax revenue effects of Californians moving to other states in a July 2024 report, finding that the lost revenue in 2022 accounted for about 1.6 percent of personal income taxes that year. Additional information this office requested from the LAO indicates that the cumulative net effect of Californians moving to other states is about $7 billion less in tax revenue each year.

Tax Policy

Raising Billions in New Taxes. Despite Governor Newsom's claim that he is not raising taxes, the budget raises taxes by $6 billion in 2024-25, and by nearly $16 billion over a multiyear period, through business tax increases that could also drive consumer prices higher. Specifically, the budget suspends the use of Net Operating Losses (NOL) for medium and large businesses and also limits business tax credit use to $5 million per year for tax years 2024, 2025, and 2026. The budget also includes a statutory trigger to rescind these tax changes if revenues are determined to be sufficient in 2025 and 2026, and authorizes refundability of tax credits for all businesses impacted by the tax credit limitation. The budget assumes revenue of $850 million in 2023-24, $6 billion in 2024-25, and $5.5 billion in 2025-26, and $3.4 billion in 2026-27 as a result of both the suspension and credit limitation.

Low-Income Housing Tax Credit. The budget provides $500 million for the Low-Income Housing Tax Credit Program to support low-income housing development, thus maintaining one tool that developers of "affordable housing" use.

Health

Two More Managed Care Organization (MCO) Tax Bills. Adding to our dependency on Washington DC, the enacted budget added two additional MCO Tax trailer bills in order to generate more federal funds to balance the budget. This action produces $7.1 billion in General Fund relief in 2024-25 and an additional $11.6 billion in later years. Overall, the MCO tax will raise $26.6 billion in tax revenue over multiple years.

Democrats Play Games with MCO Tax. While this budget does include some Medi-Cal provider reimbursement rate increases funded by the MCO tax, the budget also includes language to make these increases inoperable if the Medi-Cal provider backed ballot measure, Proposition 35, is approved by the voters in November 2024. That ballot measure would permanently use all of the MCO tax for provider reimbursement rate increases This maneuver by the Governor and legislative Democrats makes the public choose between two lists of provider reimbursement rate increases, pitting some Medi-Cal providers against others politically to retain their piece of the MCO tax pie.

To make matters worse, the budget sweeps over $7 billion of MCO tax funds away from possible Medi-Cal provider reimbursement rate increases and uses it to close the deficit. All of these hijinks signal to the public that Democrats aren't really serious about actually improving Medi-Cal.

Healthcare Minimum Wage Mandate Delayed. The final budget fails to eliminate the costly health care facility wage mandate from SB 525 (Durazo, 2023), but instead only delayed the bill's implementation to October 2024. The Department of Finance projected in 2023 that the mandate could cost up to $2 billion in General Fund annually. The budget fails to include the realistic costs of the bill, which means the budget is not truly balanced in all likelihood.

No Cuts to Undocumented Medi-Cal Eligibility. The budget fully funds the previously authorized full-scope Medi-Cal eligibility, including In Home Supportive Services eligibility, to an estimated 1.3 million undocumented individuals of all ages at a cost of $5.4 billion General Fund in 2024-25. Included in that total is the final piece of the expansion, covering childless adults ages 26 through 49, which launched January 1, 2024 without any delay, despite the massive deficit, at a cost of $2.8 billion General Fund in 2024-25.

K-12 and Early Education

Education Spending Grows Through Many Moving Pieces. The Proposition 98 TK-14 education guarantee for the 2024-25 budget year is $115 billion, nearly $16 billion over the 2023-24 guarantee of $99 billion. However, the $99 billion in 2023-24 reflects a suspension of the guarantee by $8.3 billion. The education budget package includes several moving pieces, as summarized in the chart and described below.

• Unprecedented Borrowing Scheme.The 2024 Budget Act includes a reduced version of the Governor's unprecedented scheme to keep schools whole for 2022-23 by "borrowing" $6.2 billion from cash reserves and paying it back in future years outside the normal Proposition 98 mechanisms. The budget would repay these funds to the state from non-Proposition 98 General Fund over a ten-year period from 2026-27 through 2035-36. The nonpartisan LAO criticized this scheme and described it as setting a bad precedent.
• Suspending the Guarantee.The budget suspended the 2023-24 Proposition 98 guarantee by $8.3 billion, which creates a "maintenance factor," or debt to schools, for the same amount. Maintenance factor payments will be made over time to build the guarantee back-up to what it would have been absent the suspension. This mechanism is part of the constitutionally approved funding approach, unlike the borrowing scheme described in the previous paragraph.
• School Reserve Withdrawal.The overall education package withdraws the full Public School System Stabilization Account (Proposition 98 Reserve) balance of $8.4 billion in 2023-24 to cover costs related to the suspension. The 2024-25 budget deposits $1 billion back into the Proposition 98 Reserve.

After all of these shifts, ongoing TK-12 Proposition 98 expenditures would reach $18,339 per pupil in 2024-25, and $24,314 per pupil when accounting for all TK-12 funds.

Eliminates Planned Investments in School Facility Programs. The budget eliminates a planned $550 million one-time General Fund investment in the Preschool, Transitional Kindergarten, and Full Day Kindergarten Facility Grant (FDK) program, and another $875 million one-time General Fund investment in the School Facility Program. Both investments were intended for the 2024-25 fiscal year.

Child Care and Early Education

Cuts Funding and Expanded Inclusivity for Disabled Children. The 2024-25 budget repeals the requirement that, starting July 2025, at least 7.5 percent of funded enrollment slots in California state preschool programs be reserved for students with disabilities. The required percentage would have increased to 10 percent in July 2026. By repealing the planned expansions, the budget indefinitely extends the current 5 percent requirement. The budget also sweeps $150 million in Inclusive Early Education Expansion Program (IEEEP) grant funding, intended to increase inclusion for children with disabilities and exceptional needs. These actions show a lack of prioritization for children in the disabled community.

Sets Child Care Slot Timeline into Law. The budget sets into law a timeline for the full expansion of 200,000 child care slots by 2027-28, a year later than the original goal of 2026-27. The 2024-25 budget also includes $1.6 billion to continue funding the slots that have been added since 2021-22, and includes an additional $117 million General Fund in 2024-25 for 11,000 new slots beginning October 2024.

Preschool Eligibility to Two-Year-Olds. The budget temporarily allows preschool providers to enroll two-year-old children in the California State Preschool Program (CSPP) through July 1, 2027. Currently, CSPP serves three and four-year old children. While expanding the ages served by CSPP could create issues in the child care space, one could argue it also provides more options and flexibility for parents.

Higher Education

University Base Funding Maintained. The enacted budget rejects the Governor's January proposal to defer the previously approved base funding increases of 5 percent for the University of California (UC) and the California State University (CSU), instead providing these base increases in 2024-25 with intent to defer the scheduled 2025-26 increases by a year. The UC and CSU systems would still be subject to the broader budget's across-the-board operations reduction of 7.95 percent in 2024-25, resulting in cuts of $125 million for UC and $75 million for CSU. It is not clear how the two systems will achieve those savings, and both systems already have tuition increases scheduled.

Student Financial Aid Protected. The budget rejects the Governor's proposal to cut Middle Class Scholarship by $510 million and instead maintains this funding.

Student Housing and Campus Infrastructure Shift to Bond Funding. Budgets approved in the surplus years authorized billions of dollars in General Fund grants and loans to universities and community colleges for student housing projects and other campus facilities. The 2023-24 budget clawed back the funds and shifted those projects from cash to lease-revenue bonds, creating a challenge for community colleges, some of whom had begun to spend funds on their projects. The 2024-25 budget package develops the financing structure for the community college student housing statewide lease revenue bond for 13 campuses.

Community College Nursing Expansion. The higher education trailer bill, SB 155, establishes the Rebuilding Nursing Infrastructure grant program for community college districts to expand educational opportunities in the nursing field. To support this program $60 million Proposition 98 General Fund will be provided annually for five years, starting in 2024-25.

Campus "Climate Action Plan" for Protests and Free Speech. The budget bill (AB 107) requires each UC and CSU campus to prepare a campus "climate action plan" regarding on-campus protests by October 1, 2024, as a condition of receiving $50 million of state funding. The plan must include each campus's "Time, Place, and Manner" policy, which identifies the allowable parameters of free speech activities, and the Student Code of Conduct, which determines acceptable student behavior.

Housing and Homelessness

Reduces $1 billion in Funding for Several Housing Programs. The budget includes a reduction of more than $1 billion from various housing programs, including the elimination of all remaining program funding for the Foreclosure Intervention, Housing Preservation Program ($484 million), the Infill Infrastructure Grant program ($235 million), the CalHome program ($153 million), the Adaptive Reuse program ($128 million), and the Veteran's Housing and Homelessness Prevention Program ($77 million).

Maintains $575 Million For Affordable Housing and Local Planning Grants. The budget continues to provide $315 million for the Multi-Family Housing Program, originally appropriated for the program in the 2023-24 budget, and also maintains $260 million (of the $300 million available for expenditure) for the Regional Early Action Planning Grants program appropriated as part of the 2021-22 budget.<_o3a_p>
Homeless Housing Assistance and Prevention Program. The budget provides $1 billion General Fund for Round 6 of the Homeless Housing Assistance and Prevention (HHAP) Program. A budget trailer bill, AB 166, includes additional implementation and reporting requirements for this new round of flexible funding available to local and tribal entities. The new steps may be a small improvement, but do not go far enough to ensure that billions spent to combat homelessness actually accomplish anything meaningful. The budget also includes a reversion of $260 million in supplemental funding that remains from Rounds 3 and 4 of the HHAP program.

Encampment Resolution Grant Program. The budget provides $150 million General Fund in 2024-25 for the Encampment Resolution Grant Program, and would include an additional $100 million for the program in 2025-26. Combined with new legal tools available following the U.S. Supreme Court's recent Grants Passruling (a decision supported by Governor Newsom despite his hyperbolic criticism of the Supreme Court), hopefully these funds will prove to be more effective going forward.

Natural Resources and Environment

Cap and Trade Fund Shifts. The budget redirects $5.2 billion over five years from the General Fund to the Greenhouse Gas Reduction Fund to help close the deficit. However, Cap and Trade funds continue to provide over $1 billion per year to pay for the failing High Speed Rail project, which likely will never offer any real net reduction in greenhouse gases.

Vulnerable Community Clean-Up. The budget provides $554 million (General Fund) over three fiscal years for the discovery, cleanup, and investigation of contaminated properties in vulnerable communities.

CalFire Investments: The budget also continues to support the statewide wildfire mitigation and response investments from prior years while looking ahead at the growing need for resources in this area by providing $50 million ($42 million General Fund and $8.3 million special funds) for a variety of investments to bolster CalFire's ability to prevent and respond to wildfires, as detailed below: <_o3a_p><_o3a_p>

• New CalFire Training Facility: $31.6 million General Fund for the acquisition phase of establishing a new, additional CalFire training facility, with a total estimated project cost of $631.5 million.
• ALERTCalifornia Fire Camera Mapping System: $10.4 million General Fund appropriated to CalFire for providing funding to the University of California, San Diego's ALERTCalifornia for digital imagery to support its fire camera mapping system.
• CalFire Deferred Maintenance, Ecological Monitoring, and Special Repairs: $8.34 million appropriated for various CalFire initiatives, including $2.6 million for deferred maintenance and special repair projects, $5.74 million for Ecological Monitoring, Research, and Adaptive Management.

Watershed Protection and Climate Resiliency Funding: The budget provides $37 million (General Fund) to the Wildlife Conservation Board for improving watershed protection and climate resiliency, including $18.5 million for the Cascades and High Sierra Upper Watersheds Program and $18.5 million for the Land Acquisition and Habitat Enhancement Program.

Oil and Gas Policy Changes. The budget introduces $15 million for setback legislation and grants fee authority to the Governor's Department of Conservation to address the environmental impacts of oil and gas operations. These measures could lead to increased operational costs for the industry and potentially result in higher consumer prices at a time when gas prices and the overall costs of living for Californians are already sky-high.

Energy and Utilities

Clean Energy Programs. The budget includes $147 million for various clean energy programs, reflecting reductions and delays of $884 million in 2024-25. This funding is part of a multi-year package now totaling $6.5 billion, reflecting program reductions of $1.5 billion.

Clean Energy Reliable Investment Plan. The budget delayed planned expenditures of $850 million from 2023-24, 2024-25, and 2025-26 to future years, and shifted planned future spending of $900 million for this program from the General Fund to the Greenhouse Gas Reduction Fund (cap and trade revenues). Notably, the entire $1 billion planned for this program is retained.

Middle Mile Broadband Initiative. The budget provides $250 million General Fund within the California Department of Technology for the Middle Mile Broadband Initiative, and requires prioritization of unserved and underserved areas. Additionally, the budget provides authority for an additional $250 million augmentation if certain reporting requirements are completed.

Broadband Grant Programs. This budget reduces the Broadband Loan Loss Reserve program by $125 million. The budget also reflects a delay of $200 million in Last-Mile Broadband funding from 2024-25 to 2027-28. As a result of these actions, the Last-Mile Broadband funding remains whole at $2 billion over the long term while the Loan Loss Reserve would be reduced from $750 million to $50 million.

Transportation

Gasoline Taxes Increase Again. The automatic annual gas tax increase raised the price of gas by 1.7 cents per gallon, effective July 1, 2024. These increases will generate about $262 million in tax revenues, bringing total gas and diesel tax revenue to an estimated $9.5 billion for 2024-25. This is an increase of $2 billion (26 percent) compared to the $7.6 billion in tax revenue raised the first full year of SB 1's implementation.

Transit Bailout. The budget includes $3.4 billion to bail out failing transit systems. Additionally, $1.7 billion is promised, but not guaranteed, in future years, as part of the $5.1 billion multi-year package. Between 2014 and 2018, California lost over 165 million annual transit boardings, a decline of more than 11 percent. Given these types of statistics and the massive deficit that had to be addressed in this budget, prioritizing such a large amount of money for a failing industry is mindboggling.

Zero-Emission Vehicle and Infrastructure Subsidies. The budget includes $350 million for zero emission vehicle (ZEV) subsidies, infrastructure, and equity projects. In prior budgets, the Governor committed $10 billion over five years to transition Californians to ZEVs, aligning with state regulations to ban the sale of gasoline cars by 2035. This budget reduces that commitment by about $900 million, maintaining $9.2 billion over seven years.

High-Speed Rail.The 2022-23 budget included $4.2 billion in remaining Proposition 1A (2008) bond funds for the High-Speed Rail Authority to continue the construction of the Merced to Bakersfield high-speed rail line, to be spent over several years. In addition to spending previously appropriated bond funds, the budget includes $1.1 billion in 2024-25 from Cap and Trade funds. Given the nearly $100 billion shortfall that High-Speed Rail faces to ever be completed as promised, the budget could have redirected Cap and Trade funds from High-Speed Rail to generate General Fund savings in other areas of the budget.

Public Safety and the Judiciary

No New Funding to Enhance Fentanyl Enforcement. The $22 million per year that has been allocated to the California Military Department and the Department of Justice for interdiction efforts since 2022-23 has been wholly inadequate. Despite dramatic increases in the amount of illicit fentanyl being smuggled into California and skyrocketing fentanyl overdose deaths, the budget fails to include any new funding to enhance state or local law enforcement efforts to crack down on fentanyl trafficking.

Closing Housing Units Better Than Closing Whole Prisons. The budget reflects the Governor's plan to deactivate 46 individual housing units across 13 prisons, totaling approximately 4,600 beds. This would help to align bed capacity with the prison population, which continues to trend downward due to soft-on-crime policies and the Governor's massive expansion of sentence credits in response to the broad authority provided by Proposition 57 (2016).

Because violent crime has increased dramatically over the past decade (up 32 percent since 2013) and continues to increase significantly, it is becoming increasingly likely that the state may need additional prison capacity soon. Thus, deactivating housing units is far preferable to closing entire prisons.

Across-the-Board Cuts to Trial Courts are Shortsighted. The enacted budget includes a $97 million unallocated reduction to the trial courts. The trial courts must address caseloads within budgeted resources by adjusting court calendars to accommodate criminal caseloads, which have strict statutory timelines, and civil caseloads, which generally have no statutory timeline requirements. The Governor's blind application of an arbitrary 7.95 percent unallocated reduction to the trial courts saves some money in the short term, but it will lead to further delays to civil cases, many of which already take more than a year to be resolved.

Attorney General's Posturing Will Hurt Struggling Californians. The enacted budget includes $5 million from the Unfair Competition Law Fund per year for the next three years to fund the Attorney General's social justice litigation against oil companies. These misguided lawsuits will simply drive up the cost of oil and petroleum-based products and are more likely to hurt Californians who are already paying too much for fuel and energy than actually help the environment.

General Government

State Operations Savings. The budget reduces nearly all departments' operating budgets by up to 7.95 percent in 2024-25, including personnel, operating costs, and contracting costs. The budget requires the Governor to notify the Legislature of the necessary adjustments, and to provide a plan with the January 2025 budget proposal for how the reduction in state operations expenditures would be achieved. The action would generate savings of $2.2 billion in 2024-25 and $2.7 billion annually, though questions remain as to whether these savings are truly achievable in practice.

Vacant Position Sweep. The budget permanently eliminates about 10,000 vacant positions from state departments beginning in 2024-25, yielding estimated savings of $763 million General Fund annually. Over the past three years, the number of state employees has grown significantly, from 384,000 in 2020-21 to 426,000 in 2024-25, including higher education. As revenues have declined, it is appropriate to reduce the level of state employees to ensure appropriate staffing.

State Capitol Building Annex Project. The budget appropriates $300 million General Fund in 2024-25, and commits an additional $250 million in 2025-26 and $150 million in 2026-27 to continue the acquisition, design, and construction of the State Capitol Building Annex. The budget also provides the Annex Project with an exemption from the California Environmental Quality Act through the end of the project. Since the environmental impact report is already completed, this action serves to prevent current and future potential CEQA lawsuits against the project. <_o3a_p>

New Name for Governor's Office of Planning and Research. The budget includes a reorganization of the Governor's Office of Planning and Research (OPR), including a new name, the Governor's Office of Land Use and Climate Innovation, and a new Governor's Office of Service and Community Engagement (GO-Serve). This grandiose renaming accompanies massive growth of OPR under Governor Newsom, from a research group of $54 million in 2016-17 to over $1 billion in various programs administered for 2024-25.

College Corps, Youth Jobs Corp, Climate Action Corps Programs Prioritized. Even though the budget includes billions in cuts and delays for critical priorities, such as developmental services rate increases, the Governor's recently established volunteer programs mysteriously remain a priority. The 2024 budget includes more than $170 million for these programs, leaving the full base funding intact.

Department of Real Estate (DRE) Fee Increases. The budget increases the DRE's current fees, and increases the statutory fee cap by 30 percent, allowing the department to increase fees in the future via regulations rather than through statutory changes. A budget trailer bill requires DRE, in the course of requesting a regulatory fee increase proposal, to report on the financial status of the department.

Labor and Employment

Massive Unemployment Insurance (UI) Debt Creates Interest Payments. The state is responsible for interest due on money borrowed from the federal government for UI benefit payments. The outstanding loan is more than $20 billion as of October 2024, and the budget includes an annual interest payment for 2024-25 of $484 million. California and New York were the only two states that chose notto pay off their UI debts following the pandemic, which means taxes on private job providers will increase each year to pay off the principal of the debt. This will take years to accomplish, during which time the state budget must pay hundreds of millions of dollars annually in interest costs.

Human Services

Cut to the Developmentally Disabled. The enacted budget delays the long-awaited final rate increase to developmentally disabled providers, thereby saving $306 million in one-time General Fund. This cut emphasizes that the Democrats are willing to balance the budget with cuts to this specific vulnerable population, all while spending billions on other priorities, including new expansions elsewhere.

Establishes Permanent Foster Care Rate Reform. The budget initiates the implementation of a new permanent foster care rate structure that will begin in 2027. For now, the budget includes $14.5 million one-time General Fund for automation costs, though the new rates would likely cost $1 billion total funds ($900 million General Fund) per year once fully implemented. The new rates would be based on the needs of a child or youth, rather than their placement type.

Some Programs Reduced in Size. The budget also includes several reductions to services provided under CalWORKs, such as $25 million in 2024-25 and 2025-26 for the Home Visiting Program, $47 million in 2024-25 and ongoing for Employment Services Intensive Case Management, $37 million in 2024-25 for Expanded Subsidized Employment, and $37 million in 2024-25 and $26 million in 2025-26 for mental health and substance use disorder services.

Federal Work Participation Pilot. The budget includes a provision to increase the Department of Social Services (DSS) budget by $2.4 million General Fund for automation costs if California is selected to participate in the federal work participation pilot. The budget also directs DSS to apply for this pilot program, and states the Legislature's intent to continue the push to reimagine CalWORKs as part of the application for the pilot program. To meet the goals of reimagining CalWORKs, DSS will consider proposals to modify the existing welfare-to-work process, limit sanctions, and repeal the federal work participation rate penalty pass-through.

State Employee Compensation and Retirement

State Employee Compensation Continues to Rise. The state approved Memoranda of Understanding with three bargaining units representing Highway Patrol Officers, State Firefighters, and professional scientists, whose contracts expired in summer 2024. These contracts are estimated to cost $137 million in 2024-25.

Payroll Deferral Gimmick. In an attempt to address the projected budget deficit, the budget defers $3.2 billion ($1.6 billion General Fund) in state employees' payroll costs from June 30, 2025 to July 1, 2025. This change would only be reflected in accounting and would not affect the timing of payments issued to state employees. This one-time gimmick appears to help solve the deficit on paper, but does nothing to truly bring spending in line with revenues, and would not pass muster in the private sector.

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