Will Diwali become newest state holiday? California bill awaits Newsom's decision

Historic legislation would allow state employees paid time off and permit school closures for the Festival of Lights

California Governor Gavin Newsom faces a significant decision that could make Diwali the newest state holiday, joining the ranks of Cesar Chavez Day and Native American Day in the state's official calendar.

Assembly Bill 268, authored by Assembly members Ash Kalra of San Jose and Darshana Patel of San Diego Dist 76, would designate Diwali as an official California state holiday, recognizing one of the world's oldest and most widely celebrated religious festivals.

What the Bill Means for California Workers

If signed into law, AB 268 would allow state employees to take time off with pay to observe Diwali. The legislation would also permit California community colleges and public schools to close in recognition of the holiday, though closure would not be mandatory and would require agreement through memoranda of understanding with employee unions.

Because Diwali follows the Hindu lunar calendar rather than the Gregorian calendar, the official date changes yearly. Under this proposal, Diwali would be established as "the 15th day of the month of Kartik in the Hindu lunar calendar of each year", which typically falls between mid-October and mid-November.

The timing is particularly significant for working families. The holiday fortuitously aligns with "that time of year when families are more likely to take time off from school or to take time off from work in order to celebrate," according to Samir Kalra, managing director for policy and programs at the Hindu American Foundation.

Educational institutions would also be authorized to include exercises "acknowledging and celebrating the meaning and importance of Diwali," funded through existing resources, similar to provisions for Native American Day and Genocide Remembrance Day.

Budgetary Implications: The Real Costs

While AB 268 requires no state appropriation according to the bill text, this designation does not mean the legislation is without cost. The economic impacts are substantial when properly analyzed:

State Employee Productivity Costs

California employs approximately 250,000 full-time-equivalent state workers, with salaries and salary-driven benefits totaling roughly $40 billion ($20 billion from the General Fund) in 2024-25. Adding another paid holiday means one less day of productive work per year for eligible state employees.

Based on these figures, the average annual compensation per state employee is approximately $160,000 (including benefits). With approximately 260 working days per year (52 weeks minus weekends and existing holidays), each workday represents roughly 0.38% of annual productivity. For 250,000 employees, one additional holiday translates to approximately $152 million in lost annual productivity ($76 million from the General Fund).

This cost manifests in several ways:

Reduced government services: One fewer day of state operations means delayed processing of permits, licenses, and public services
Increased staffing needs: To maintain the same level of annual output, agencies would need additional personnel or overtime costs
Project delays: Multi-year initiatives lose productive time, potentially extending completion timelines

Educational Impact and Instructional Time Requirements

California school districts are generally required to provide 180 instructional days per year, with districts that meet or exceed their Local Control Funding Formula (LCFF) funding targets facing fiscal penalties if they offer fewer than 180 days.

If schools close for Diwali, they would need to either:

Add an instructional day elsewhere in the calendar to maintain the 180-day minimum, extending the school year
Absorb the loss if they currently offer more than 180 days
Face fiscal penalties if they fall below the minimum without compensation

For districts operating at exactly 180 days, adding Diwali would require extending the school year by one day, which creates cascading costs:

Facility operational costs (utilities, maintenance, security)
Transportation expenses
Food service costs
Employee compensation for the additional day

California has over 10,000 public schools. Even modest per-school costs of $5,000-$10,000 for an additional operating day would total $50-100 million statewide.

"Existing Resources" Are Not Free Resources

The bill specifies that educational activities celebrating Diwali must be "funded through existing resources." However, existing resources are already allocated to other educational purposes. Redirecting funds to Diwali programming means:

Opportunity costs: Money spent on Diwali celebrations cannot be spent on other educational programs
Administrative burden: Teachers and staff must dedicate time to planning and executing these activities
Material costs: Supplies, decorations, and resources for celebrations must come from somewhere in the budget

Community College and Public School Employment Costs

School and community college employees who receive paid time off for Diwali represent additional costs. California employs hundreds of thousands of K-12 and community college staff. Even if only a portion take the day off with pay, the aggregate cost is substantial.

The Fiscal Committee Designation

AB 268 includes a "Fiscal Committee: YES" designation, indicating that the Legislature recognized the bill has budgetary implications requiring fiscal review. The "Appropriation: NO" designation simply means the bill doesn't directly appropriate funds in the current budget year—it doesn't mean the bill is cost-free.

Comparing to Similar Holidays

California already provides numerous paid holidays for state employees. Each additional holiday compounds the total cost of lost productivity. Some states have addressed this by making new cultural holidays optional or by allowing employees to choose which holidays they observe within a fixed number of annual holiday days.

Hidden Costs in Private Sector

While the bill directly affects only public sector workers and schools, making Diwali an official state holiday creates pressure on private employers to provide time off as well. This could affect California's business climate and competitiveness, though such effects are difficult to quantify.

Understanding Diwali: The Festival of Lights

Diwali, also known as Deepavali, is one of the most important festivals in Hinduism, though it is also celebrated by Buddhists, Sikhs, and Jains. The festival symbolizes "the triumph of light over darkness, knowledge over ignorance, and the blessings of victory, freedom, and enlightenment".

The holiday is traditionally celebrated for five days, with the main celebration occurring on the third day during the new moon. During Diwali, celebrants light oil lamps (diyas) and candles, set off fireworks, exchange gifts, share festive meals, and offer prayers to deities, particularly Lakshmi, the goddess of wealth and prosperity.

The specific religious significance varies by faith tradition. Hindus celebrate it as the return of Lord Rama to his kingdom after defeating the demon king Ravana, while Sikhs commemorate it as the day Guru Hargobind was freed from imprisonment, and Jains observe it as the day Lord Mahavira attained liberation.

Diwali Celebrations in India

In India, Diwali is a gazetted public holiday, meaning government offices, post offices, and banks are closed nationwide. The festival represents one of the most significant celebrations in the Hindu calendar, with different regions adding their own unique traditions.

In North India, celebrations honor Lord Rama's homecoming with grand displays of lights and fireworks. In West India, business communities in Gujarat and Maharashtra celebrate Diwali as the start of the new financial year with traditional account book rituals. In East India, particularly Bengal and Odisha, Diwali coincides with Kali Puja, a night of worship dedicated to Goddess Kali.

Major Indian cities host spectacular celebrations, with Ayodhya in Uttar Pradesh, the Dashashwamedh Ghat in Varanasi, Mysore Palace, Lake Pichola in Udaipur, and Johri Bazar in Jaipur being particularly renowned for their Diwali festivities.

Global Recognition and Celebrations

Official Holiday Status Worldwide

The main day of Diwali is an official holiday in numerous countries including Fiji, Guyana, India, Malaysia, Mauritius, Myanmar, Nepal, Pakistan, Singapore, Sri Lanka, Suriname, and Trinidad and Tobago. Pakistan adopted Diwali as a public holiday in 2016, giving local governments and public institutions the right to declare it as a holiday for minority communities.

European Celebrations

While no European countries recognize Diwali as an official public holiday, the festival has gained significant cultural recognition, particularly in the United Kingdom. Diwali is not a bank holiday in the United Kingdom, but it is celebrated in many towns and cities such as Belfast, Birmingham, Edinburgh, Leicester, and London.

The city of Leicester holds the largest Diwali celebrations outside of India, with tens of thousands of people gathering in the streets annually to enjoy vibrant shows of light, music, and dancing. In London, the Mayor hosts an annual "Diwali on the Square" celebration at Trafalgar Square, featuring music, dance, performances, family-friendly activities, and market stalls.

Since 2009, Diwali has been celebrated every year at 10 Downing Street, the residence of the British Prime Minister, and the Catholic Pontifical Council for Interreligious Dialogue has sent official greetings to Hindus on Diwali since the mid-1990s.

In Germany, while Diwali is not an official holiday, the Indian diaspora organizes community celebrations in major cities. Events take place in Berlin, Bonn, Frankfurt, and other cities, featuring traditional dance performances, Indian cuisine, cultural programs, and religious ceremonies.

Recognition in Other U.S. States

California would join a growing number of U.S. states officially recognizing Diwali. In October 2024, Pennsylvania became the first state to officially recognize Diwali as a state holiday when Governor Josh Shapiro signed Senate Bill 402 into law. However, even though Diwali is officially designated as a state holiday in Pennsylvania, schools, government offices, and businesses are not required to close for it.

Other states that recognize Diwali as an official holiday in some capacity include New York, New Jersey, and Texas. Texas approved Diwali as a fireworks-eligible holiday in 2023, allowing individuals to sell or purchase fireworks starting five days before Diwali and ending on the last day of the festival.

Diwali was first celebrated in the White House by President George W. Bush in 2003, and its religious and historical significance was officially recognized by the United States Congress in 2007. President Barack Obama became the first president to personally attend Diwali celebrations at the White House in 2009.

A Celebration with Significant California Reach

California is home to the largest Indian population in the United States, with close to 900,000 Indian Americans. While Hinduism includes numerous holidays, Diwali was chosen as the subject for AB 268 because it has the most consistent celebration across the entirety of the South Asian American population, being observed for different reasons based on the religion a person subscribes to.

Assembly member Kalra stated that "Designating Diwali as an official state holiday not only recognizes the festival's religious and historical importance but will better enable those throughout the Indian diaspora and beyond to take part in one of the world's oldest religious holidays".

Opposition Concerns

Despite passing with overwhelming majorities in every legislative vote—78-0 in the Assembly on June 2 and 36-0 in the Senate (with four abstentions) on September 10—the bill has faced opposition from some religious freedom advocates.

The California Family Council argues that AB 268 "breaches the neutral stance the state is supposed to have towards particular religions and instead promotes the celebration of Diwali, a religious holiday for Hindus, Sikhs and Buddhists within our public schools".

Critics contend that the bill's provision allowing educational institutions to "include exercises, funded through existing resources, acknowledging and celebrating the meaning and importance of Diwali" crosses the line from education to religious promotion. "If you're teaching them to celebrate, that is not objective," said California Family Council Vice President Greg Burt. "You're now requiring a kid to participate in a religious activity that might not be his faith."

The Church State Council also opposes the bill, arguing "it is not the government's role to promote religions, or to favor any religion above any other".

The final decision now rests with Governor Newsom, who must weigh the cultural significance of recognizing California's diverse communities against the substantial fiscal costs and constitutional concerns. If approved, California would join a global community of nations honoring one of the world's most celebrated holidays, but at an estimated annual cost exceeding $200 million in lost productivity and additional operational expenses.

Estimated Total Annual Cost: $200-250 Million

1. State Employee Productivity Loss: ~$152 Million

Calculation basis:

250,000 full-time-equivalent state employees
Total annual compensation: $40 billion ($160,000 average per employee including benefits)
260 working days per year (after weekends and existing holidays)
One additional holiday = 0.38% of annual productivity
Cost: $152 million total ($76 million from General Fund)

2. School District Additional Instructional Day: $50-100 Million

Calculation basis:

Over 10,000 public schools in California
Districts at 180-day minimum must add a day elsewhere
Per-school cost for one additional operating day: $5,000-$10,000
- Utilities and facility operations
- Transportation/bus service
- Food service
- Staff compensation
Cost: $50-100 million statewide

3. Community College and K-12 Staff Paid Leave: Variable, potentially $25-50 Million

Hundreds of thousands of K-12 and community college employees
Those taking paid time off represent direct payroll costs
Even partial participation creates substantial aggregate costs

4. Administrative and Programming Costs: Difficult to Quantify

Teacher time for planning Diwali educational activities
Materials and supplies for celebrations
Opportunity costs of redirecting "existing resources"

Important Caveats:

The bill states "Appropriation: NO" - meaning no new money is directly allocated. However, this is misleading because:

Lost productivity is a real cost - State services still need to be delivered, potentially requiring:
- Overtime pay
- Delayed projects
- Reduced public service delivery
Schools must still meet instructional time requirements - The cost doesn't disappear; it shifts to:
- Extended school years
- Compressed schedules
- Fiscal penalties for non-compliance
"Existing resources" means reallocation - Money spent on Diwali programming cannot be spent on other educational priorities

Why the Fiscal Analysis Appears Minimal:

The bill includes "Fiscal Committee: YES" but "Appropriation: NO". This creates a situation where:

The Legislature acknowledges fiscal impact requiring review
But no direct appropriation is made in the budget
The costs are absorbed through reduced productivity and reallocated resources
These "hidden costs" don't appear as line items in the state budget

Comparison Context:

To put this in perspective, this single holiday would cost roughly:

0.38% of the state's annual payroll
Equivalent to hiring approximately 950 additional full-time state employees at average compensation
More than many small state agency budgets

Bottom Line: The annual cost is conservatively estimated at $200-250 million, though the bill's structure means these costs won't appear as direct budget appropriations but rather as reduced productivity, extended school calendars, and opportunity costs throughout state operations.

Diwali and Halloween Proximity

Diwali can occur very close to Halloween, and in some years they overlap or fall on consecutive days as well as on a weekend.

Examples from Upcoming Years:

2025:

Halloween: October 31 (Friday)
Diwali: October 20-21 (Monday-Tuesday)
Gap: 10-11 days apart

2026:

Halloween: October 31 (Saturday)
Diwali: November 8 (Sunday)
Gap: 8 days after Halloween

2027:

Halloween: October 31 (Sunday)
Diwali: October 29 (Friday)
Gap: Only 2 days before Halloween

2028:

Halloween: October 31 (Tuesday)
Diwali: October 17 (Tuesday)
Gap: 14 days apart

When They Actually Overlap

Looking at recent history, in 2024, Diwali fell on November 1 DIWALI - Changes Annually - National Day Calendar

Sources

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California Considers Making Diwali an Official State Holiday