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What Newsom’s Sweeping Budget Cuts Could Mean for IT

California Gov. Gavin Newsom unveiled a $291.5 billion budget this week that proposed resolving a roughly $37.8 billion shortfall with cuts, delayed and deferred funding and by withdrawing $13 billion from state reserves.

Sacramento,,Ca,-,March,8,,2022:,California,Governor,Gavin,Newsom
California Gov. Gavin Newsom
Shutterstock
The state technology department would receive substantially less funding than last year overall from Gov. Gavin Newsom’s proposed 2024-2025 fiscal year state budget, with the unkindest cut — more than half its potential decrease — coming from the elimination of a key federal funding stream.

Newsom unveiled a $291.5 billion budget at a news conference Wednesday that proposed resolving a roughly $37.8 billion shortfall with cuts, delayed and deferred funding and by withdrawing $13 billion from state reserves. (All numbers in this article are rounded.) The ultimate impact of an austere budget year on the California Department of Technology is not yet clear, and the department’s policy is to not discuss the proposed budget. But in broad numbers, its portion of Newsom’s overall budget would shrink significantly from $4.1 billion in FY 2023-24 to $1.2 billion in FY 2024-25.

By the numbers, that is a cut of $2.9 billion — but much of that derives from the removal of one key funding stream: federal monies from the Coronavirus Fiscal Recovery Fund of 2021, which brought CDT $234 million in FY 2022-23 and $2.1 billion in FY 2023-24. In FY 2024-25, that funding source would be zeroed out — but notably, the department would also receive much less funding from the state’s General Fund. Newsom’s budget proposes giving CDT more than $556 million from the General Fund in FY 2024-25, down from about $1.3 billion in FY 2023-24. That’s a decrease of roughly $750 million, and it accounts for the preponderance of the department’s losses should this budget pass. In accordance with the California Constitution, the governor has until Jan. 10 every year to present his proposed budget for the upcoming fiscal year, and members of the state Senate and Assembly have until June 15 to approve a state budget for the fiscal year starting July 1.

So far this fiscal year, the California Department of Finance lists zero budget change proposals (BCP) from CDT — in contrast to FY 2023-24, when the department submitted 14 BCPs. The department could still submit technical changes needed, to the Legislature, up to April 1 via a Spring Finance Letter. But CDT’s proposed FY 2024-25 budget does include funding for three major areas of tech spend that are very likely grounded in FY 2023-24 budget change proposals seeking funding for that fiscal year as well as ongoing spend:

  • $250 million and 36 positions for the Middle-Mile Broadband Initiative, possibly as a result of a FY 2023-24 BCP that sought $840,000 in FY 2023-24 and $660,000 in FY 2024-25, all from the General Fund. The funding was needed, CDT said in the BCP, to pay for professional and consulting services contracts to establish the Broadband Access Point Investment Acceleration Study Act of 2022, commissioned by state Senate Bill 717. If approved, the funding and positions would no doubt be welcome; members of the Middle-Mile Advisory Committee learned in July that while total available funding had risen to $3.87 billion, network miles needed had expanded 26 percent to 10,000 — and construction bids for roughly half the network were 40 percent higher than anticipated.
  • $809,000 for Intrusion Detection and Prevention System Replacement, possibly coming out of a FY 2023-24 BCP that sought roughly $3 million in General Fund authority in FY 2023-24 to upgrade state intrusion detection and intrusion prevention systems; and $1.9 million in ongoing General Fund authority to maintain those systems starting in FY 2024-25. The upgrades were necessary, CDT said, to continue mounting a frontline defense against bad actors.
  • $250,000 for Information Security Compliance, potentially the result of a FY 2023-24 BCP seeking seven positions and $1.5 million in General Fund authority in FY 2023-24 and ongoing to support the workload needed to implement requirements of state Assembly Bill 2135. That bill required state agencies whose information security isn’t handled by the Office of Information Security to put in place Federal Information Processing Standards and National Institute of Standards and Technology standards on information security and privacy. The bill also required the agencies to contract with the California Military Department or a “qualified responsible vendor” every two years for a “comprehensive, independent security assessment” and to certify every year that they meet those standards.

Editor's note: This article has been updated to correct information security and intrusion detection funding numbers.

This article was originally published by Industry Insider — California, Government Technology's sister publication.
Theo Douglas is news editor for Government Technology. He was previously assistant managing editor for Industry Insider — California. His reporting experience includes covering municipal, county and state governments, business and breaking news.