Gov. Newsom proposes massive spending as state coffers overflow
When Gov. Gavin Newsom offered his preliminary budget proposal in January, he noted a reversal of fortune that had turned a projected pandemic-induced $54.3 billion shortfall into a $15 billion surplus, but even so, called California’s future “tenuous” and preached “prudence” and “fiscal discipline.”
No more. While the state’s catastrophic winter coronavirus case surge was peaking in January, California today boasts the country’s lowest infection rate, and is poised for an economic rebound.
That $15 billion surplus has ballooned five-fold to a projected $75.7 billion, and Newsom aims to spend it on longstanding priorities in his $267.8 billion budget, up from $227.2 billion proposed in January.
The general fund budget that pays for most programs and services is now $196.8 billion, up $32.3 billion since the $164.5 billion in January’s proposal. The overall budget has increased by $40.6 billion.
Much of Newsom’s proposed $100 billion California Comeback Plan, which his office calls “the biggest economic recovery package in California history,” was already laid out in a series of appearances across the state this week.
“This is a generational budget,” Newsom said. “This is a historic, transformational budget, not a budget that plays small ball. We’re trying to do things the state has talked about but never been able to accomplish because we never had the resources.”
It calls for significant spending increases for five priorities: economic relief for hardship stemming from the state’s business restrictions during the pandemic; homelessness and housing affordability; improving public education after extensive school closures; transportation; and wildfires fueled by a warming climate.
Republicans characterized the Democratic governor’s proposals as buying support from voters who will decide whether to recall him in the fall, with spending to cover damage caused by his administration’s extensive business and school closures during the pandemic.
“It’s the same song every day, throwing taxpayer money at the host of problems he created in the first place,” California Republican Party Chairwoman Jessica Millan Patterson said in a statement Friday.
California Can’t Wait, a coalition of public health officials and workers said they were in “deep dismay” that the budget includes “zero new dollars to rebuild the state’s battered local public health departments.”
“The biggest lesson of COVID-19 is that waiting until a crisis to invest in public health costs lives,” said Michelle Gibbons, executive director of the County Health Executives Association of California.
Newsom said in response he hopes “they take a closer look at the budget,” which he said includes “transformation investments” in the Medi-Cal system and $300 million for public hospitals.
Democratic lawmakers who control the legislature and must approve the budget by June 15 praised the governor’s plan.
“This year’s budget surplus gives us an opportunity to make generational investments in the longterm health, education and wellness for all Californians,” said Assemblyman Marc Levine, D-Marin County.
Here’s what’s proposed in the budget:
• Pandemic economic relief: $8.1 billion in stimulus checks of $600 to $1,100 distributed to two out of three state residents; $4 billion in direct grants; and $6.2 billion in tax cuts for small businesses. It also includes $5.2 billion to help low-earning renters cover unpaid rent; $2 billion for past-due utility bills; and $1 billion in new grants to workers who lost their jobs during the pandemic.
• Homelessness: $12 billion aimed at helping more than 65,000 people get off the streets or avoid homelessness; $3.5 billion in rental support for families through the CalWORKs aid program; and $3.5 billion to build more affordable housing for low-earning families.
• Schools: $20 billion for schools includes expanding transitional kindergarten so all 4-year-olds are eligible to achieve universal pre-school; 100,000 more child care slots; and $500 in seed money for 3.7 million kids from poor families to start college savings accounts.
• Infrastructure: $11 billion for roads, bridges, high speed rail, ports and public transportation — including projects for the 2028 Olympics, and $7 billion to provide broadband internet access to more residents.
• Wildfire and climate change preparedness: $5.1 billion in drought support, water supply, and natural landscape projects around the state; $1 billion in direct aid for Californians with overdue water bills; and $3.2 billion to accelerate the state’s zero-emission vehicle goals. Also on tap is $2 billion for purchasing new firefighting equipment like airplanes and helicopters, as well as forest management projects.