In the aftermath of a government report projecting a $68 billion deficit for the 2024-2025 fiscal year, the California Department of Finance ordered a spending freeze across all state agencies for the remainder of the ongoing 2023-2024 fiscal year.
“The State of California anticipates significant General Fund budget deficits in fiscal years 2023-24 and 2024-25,” wrote California Department of Finance director Joe Stephenshaw in a statewide memo. “Accordingly, this [budget letter] directs all entities under the Governor’s direct executive authority to take immediate action to reduce current-year General Fund expenditures.”
While there are exemptions for declared emergencies, avoiding significant revenue loss, and achieving significant net cost savings, state agencies are directed to not enter any new contracts for goods and services, buy new IT equipment or vehicles, or travel outside of “time-sensitive or critical need.”
