FLUSH WITH CASH, CALIFORNIA FACES CHOICES

Gov. Gavin Newsom’s announcement of a $267.8 billion state budget contained so many new programs and expansions of government services that it’s hard to know where to begin. But one point seems obvious above all: The initial focus of new spending enabled by a nearly $76 billion surplus mostly generated by a flood of capital gains tax revenue should be on permanent improvements. Seven times over the past 25 years, state revenue has gone down from year to year — twice by 20 percent. There should be no assumption that the revenue now available to the state — or close to it — will be there going forward. Investments should be shrewd. That’s why these parts of Newsom’s plan stand out:

• $12 billion to reduce homelessness, including providing housing to 65,000 people and seeking to stabilize the housing situation for more than 300,000 people facing housing challenges. Using unexpected windfalls to create permanent housing for the homeless is a good idea, but Newsom must sweat the details. Given the extreme expense of building “affordable” housing, the state should focus on buying motels and other existing housing stock.

• $11 billion to smartly upgrade transportation infrastructure, starting with beaten-up roads, bridges and ports — but also some of it for the troubled bullet-train project, possibly with the help of new federal funding provided by President Joe Biden. High-speed rail sounds great in theory. But the California High-speed Rail Authority has never been able to come within shouting distance of promises it made about construction, costs and its ability to attract outside investors. There are far wiser investments than pouring money into that project.

• $7 billion to add internet infrastructure to make broadband much more available in poor urban and rural areas. Lack of access to good internet service isn’t just a problem with distance learning. It makes life more difficult in many ways for many people.

• $6 billion on water and drought issues. More water storage and capacity would help Californians in times like these when the governor has declared drought emergencies in 41 of the state’s 58 counties — and in times when conditions are worse. It would provide more stability for a situation in need of it.

• $2 billion for wildfire preparedness, in particular the purchase of new firefighting equipment, on top of the $536 million plan the governor and legislative leaders agreed to last month. The terrifying wildfires of the last decade may keep coming because of the climate emergency, but better-equipped fire units can limit deaths and damage.

Many of Newsom’s other spending proposals sound thoughtful and humane, including universal preschool. However, they deserve far more caution. His predecessor, Jerry Brown, warned against making long-term commitments that assumed the state would have the funding to cover them.

Being flush with cash is a great feeling. But capital-gains revenues go up and down like a roller coaster. Newsom and the state Legislature need to grasp this to keep the state from overcommitting.