By Antonio Ray Harvey, California Black Media
A week before the California Legislature was required to pass a balanced budget on June 15, and send it to Gov. Gavin Newsom, State Controller Malia M. Cohen urged lawmakers to exercise fiscal discipline to guard against ups and downs in state revenue and the risk of future budget shortfalls.
Speaking at the UC Student and Policy Center’s California Economic Forum in Sacramento on June 9, Cohen pointed to the state’s 2024-25 Annual Comprehensive Financial Report (ACFR) as an essential tool for understanding California’s true fiscal condition.
The ACFR is the state’s official audited financial statement, providing a comprehensive snapshot of California’s finances based on actual revenues, expenditures, assets and liabilities.
Cohen noted that this year’s report marked the first time since 2019 that California received an unmodified auditor’s opinion and completed the report before the release of the governor’s May Revision budget proposal.
According to the ACFR, California reported $595.5 billion in revenue and $582.5 billion in expenditures during the 2024-25 fiscal year, resulting in a statewide surplus of approximately $13 billion.
Cohen said the report serves as a critical accountability tool during budget negotiations because it relies on audited financial data rather than projections.
Cohen highlighted concerns about the state’s dependence on high-income taxpayers, the sustainability of stronger-than-expected tax revenues and the risk that short-term financial fluctuations could worsen long-term budget challenges.
“ACFR is important to the fiscal health and wellness of the state of California,” Cohen said. “Think about how it impacts our bond rating. Think about the bond rating as your personal credit score.”
Cohen added, “For us to be creditworthy, for people to loan us money, borrow money to balance out our debts, we need (ACFR) to be out on time and to be clean.”
The third annual California Economic Forum, organized by the UC Student and Policy Center in partnership with POLITICO, brought together economists and policymakers to discuss California’s economic trajectory and the fiscal challenges facing the state.
While the Controller’s Office compiles the report, state departments must reconcile their financial records with year-end figures submitted to the Department of Finance.
As controller, Cohen’s constitutional responsibilities center on cash management, accounting and fiscal oversight. Her office issues monthly cash reports detailing actual General Fund revenues and expenditures, providing lawmakers with up-to-date information on the state’s fiscal position.
California’s fiscal year begins July 1. The governor must sign a final budget by June 30 to ensure the state can continue funding operations, employee salaries and vendor payments without interruption.
Cohen said the ACFR gives lawmakers and the public a clearer understanding of California’s financial reality by grounding budget discussions in audited data rather than assumptions.
