After a few years of record spending increases, the Legislature slowed the growth in the operating budget this year. As enacted, appropriations from funds subject to the outlook (NGFO) for 2023–25 are up 8.9% compared to the 2022 supplemental.

New policy spending of $4.744 billion is the most of any original biennial budget going back to at least 2007–09. The Legislature was able to adopt so much new policy spending while keeping total growth at a modest level in part because of the unusually high level of one-time spending in 2021–23. (More than 70% of the new spending in the historically large 2022 supplemental budget was meant to be one-time, rather than ongoing.) Of the new policy spending in 2023–25, 42.6% is related to increases in employee compensation and service provider rates. (This is an example of the impact that inflation has on the spending side of the budget.) Aside from compensation, two major areas of new policy spending are special education and housing programs.

Although revenue growth is also expected to slow in 2023–25 (adjusted for inflation, revenues are estimated to decrease), the March 2023 revenue forecast estimated that NGFO revenues would be $3.106 billion higher through the outlook period than was expected when the 2022 supplemental budget was adopted. The Legislature did not increase general taxes this year. The budget balances over four years, but the balance relies on the use of reserves and other one-time funds, and it makes some budgetary assumptions that raise concerns about sustainability.

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