State officials confirmed on Tuesday the election is expected to have an impact on California's state budget situation, with voter-approved propositions likely taking a sizable chunk out of state spending coupled with challenges that may arise between California and the incoming Trump administration. After grappling with back-to-back years of budget shortfalls, California has been seeing a surge of state revenue with about $4 billion more than what officials had been expecting in the first few months of the budget year. Newsom's Department of Finance spokesman credited the strength of the state's tech and artificial intelligence companies for the influx. "It's a reflection of a resilient economy," Newsom's Department of Finance spokesman H.D. Palmer told KCRA 3 in an interview. "All that is good and welcome, but it's not free money, we have to recognize the obligations." Those obligations range from ballot measures that voters approved in last week's election, coupled with the likely changing financial relationship between California and the federal government. The state's Legislative Analyst at the end of this month is expected to release its first budget outlook for the upcoming year, and the governor will present the first version of his state spending plan in early January. Ahead of those presentations, here is a look at what state experts say is driving the uncertainty. President-elect TrumpAfter closing budget gaps for the last two years, Gov. Gavin Newsom and the legislature are eyeing new spending dedicated to protecting California from threats the incoming President has made or policy changes he may push for that run counter to the state's Democratic agenda. The governor called a special legislative session to prepare, and one of the first moves he and lawmakers will make involves providing extra funds to the California Department of Justice. The money is meant to help state Attorney General Rob Bonta with legally fighting the administration on a range of issues that could include the environment, immigration, abortion and LGBTQ protections. Bonta could not say last week how much money his agency needs, but that discussions were ongoing. That figure is expected to be in the tens of millions, with some in the legislature expecting the governor to request up to $150 million. Newsom is also considering putting together a disaster relief fund after Trump threatened to withhold those dollars over the state's water policies. It's not clear how much money the governor is aiming to earmark for this, but it could be expensive. "The governor is putting a lot of these decisions in motion," Palmer said. "The good news is that we do have reserves that are built up." Republican State Sen. Roger Niello, who is the vice chairman of the Senate's Budget Committee, said the uncertainty would exist regardless of who is president. Niello noted a larger share of Californians voted for Trump in this election than they did in 2020, flipping a handful of counties from blue to red. "The governor needs to be mindful of that as he tries to thwart things the Trump administration might want to do," Niello said. Proposition 35 - Healthcare spending California voters overwhelmingly approved Proposition 35 this year, which among many things, restricts the way the legislature and governor can use funds provided through a tax on health insurance plans moving forward. Instead of allowing the state to use it to generally cover healthcare spending needs, the funds will need to be used to increase reimbursement rates for healthcare providers who provide treatment to lower-income Californians. The governor warned ahead of the election that if voters approved this, it could mean an immediate reduction of several billion dollars from the state's budget. Palmer said the Department of Finance and Legislative Analyst are now analyzing the budget impact that the decision could have immediately and in future budget years. "On Prop 35, there is a real draw on the general fund," Niello said. The ballot initiative also requires federal approval, and Palmer noted the incoming Trump administration could potentially try to change the policy. California has expanded access to the state's Medicaid program to include lower-income residents, regardless of immigration status. Trump has threatened to repeal benefits provided to undocumented people. "That's one of the reasons Gov. Newsom is in Washington D.C. this week," noted Palmer. "He's meeting with members of California's congressional delegation to talk through these issues and trying to prepare as best we can." Propositions 2 and 4 - Borrowing money for schools and climateCalifornia voters approved two propositions that will allow the state to borrow a total of $20 billion for school upgrades and climate projects. Their impact isn't expected to be as significant but will mean additional spending to pay down the debt with interest. "The rough rule of thumb is for every additional $1 billion in bonds that are authorized, that will cost the state about $60 million per year in interest costs over the life of the 30-year bond," Palmer said. "Those are additional costs that we're going to have to look at as well." "It needs to be moderated based upon the availability of funds, meaning the budget itself," said Niello. "We really don't know what impact that is. It could be a couple hundred million dollars a year, depending on the timing of the issuance of the bonds." Proposition 36 - Retail theft and fentanyl crimes "There is an elephant in the room here, and that is Proposition 36," said Niello. California voters overwhelmingly passed Proposition 36, which ramps up the consequences for some drug and theft crimes, but it did not have any new funding included in the proposal. It includes a "treatment-mandated felony," which will require new spending. Niello said it will be up to the governor and legislature to ultimately figure out how to pay for it. The governor has promised to implement the will of the voters, despite being one of the measure's biggest opponents. "It's going to be very difficult for them to completely ignore the will of 70% of the voters in the state," he said. "If we need more funding for something voters overwhelmingly demanded, and there's not enough money with existing commitments, then we're going to have to cut back on existing commitments." The governor and state lawmakers begin negotiating the state budget in January, and usually finalize that plan at the end of June. To find the latest election results in California, click here. 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