Dear John,

Last week, Governor Newsom released his May Revise. There are four key points I want to share about the updated budget proposal and what it means for our joint work ahead:

1. The state’s deficit has grown since the Governor’s January proposal. Previously, the administration estimated the shortfall at around $38 billion, and accounting for the recent state tax returns from 2023, has increased that deficit to $56 billion. 

2. For housing, we have both good and bad news. With appreciation to members and partners who advocated alongside NPH, we are glad to share that our highest priority ask was adopted in the Governor's latest proposal. Even in the midst of this extremely tight budget year, the Governor’s May Revise restored the $500 million to the Enhanced State Tax Credits. But there were also additional cuts, including the remainder of the Multifamily Housing Program program for ‘23/’24. 

3. This begins the busy season, and we have work to do. The May Revise is the start of highest level negotiations between the Assembly Speaker, the Senate Pro-Tempore, and the Governor. The Legislature has one month to pass a balanced budget and the governor will then have two additional weeks to sign it. In that time, we need to do outreach to legislators to continue to advocate for investments in affordable housing  – including protecting what we do have. 

4. Our opportunities to enact solutions extend beyond the state budget. Cycle-by-cycle budget negotiations are a challenging way to enact long-term solutions, and in particular, the past two year’s budget cycles have reinforced this point. NPH is deeply engaged in efforts to advance state and regional electoral solutions that can empower local jurisdictions to address their housing needs and generate revenue at scale.

Our Efforts Ahead NPH’s advocacy efforts will include identifying the strongest budget package we can secure for the region’s and state’s critical affordable housing needs, as well as exploring strategies outside of the budget to advance our goals. We are stronger together.