New­som’s 1st bud­get post­pones big bat­tles

$209 bil­lion spend­ing plan achieves po­lit­i­cal bal­ance

San Francisco Chronicle (Sunday) - - FRONT PAGE - By John Wil­der­muth

Gov. Gavin New­som threaded the po­lit­i­cal nee­dle with his first pro­posed state bud­get, putting out a spend­ing plan that’s both bold and cau­tious, duck­ing the type of pitched bat­tles that many of his more grandiose cam­paign prom­ises might have pro­voked.

The $209 bil­lion fis­cal blue­print has plenty to de­light his pro­gres­sive back­ers, but the new gov­er­nor also worked to avoid en­rag­ing more fis­cally con­ser­va­tive Cal­i­for­ni­ans. New­som leav­ened his calls for so­cial mea­sures like boost­ing wel­fare checks and pro­vid­ing health care for more un­doc­u­mented im­mi­grants with plans to pay off the state’s debts, boost Cal­i­for­nia’s bud­get re­serves and make a down pay­ment on clos­ing the pub­lic pen­sion short­fall.

“I thought it was an adept way of mak­ing it ab­so­lutely clear that it’s a new day in the gov­er­nor’s of­fice, but also that (New­som) is go­ing to build on (for­mer Gov.) Jerry Brown’s foun­da­tion,” said Raphael So­nen­shein, ex­ec­u­tive di­rec­tor of the Pat Brown In­sti­tute for Pub­lic Af­fairs at Cal­i­for­nia State Uni­ver­sity Los An­ge­les. “He showed it will be his gov­er­nor­ship, but did it re­spect­fully.”

It wasn’t an ac­ci­dent that New­som opened Thurs­day’s bud­get pre­sen­ta­tion by talk­ing about what he’s sav­ing, not what he’s spend­ing.

“We are pre­par­ing for un­cer­tain times,” he said, not­ing that more than 86 per­cent of the new spend­ing in the bud­get would go for one-time ex­penses, such as build­ing and ren­o­vat­ing class­rooms to al­low school dis­tricts to start full-day kinder­gartens, pro­vid­ing cash for de­ferred main­te­nance on state col­lege and uni­ver­sity cam­puses, and train­ing new child care work­ers.

One-time ex­penses are just that: money the state spends only this com­ing year. The econ­omy could stall next year and state rev­enue dry up — one­time spend­ing cre­ates no new pro­grams to be stranded by the out­go­ing tide.

New­som would send more than $13 bil­lion of Cal­i­for­nia’s es­ti­mated $21.4 bil­lion sur­plus for fis­cal 2019-20 back to the state. That money would re­pay what’s left of the debt from the state’s cash crunch of a decade ago, pump up a rainy-day fund and a sep­a­rate emer­gency re­serve — think wild­fires — and put money into Cal­i­for­nia’s cash-starved pub­lic pen­sion funds, a long­time con­cern of GOP leg­is­la­tors.

While the $4.8 bil­lion pen­sion pay­ment is lit­tle more than a round­ing er­ror to the es­ti­mated $257 bil­lion short­fall for pub­lic pen­sions, it can be seen as an olive branch from New­som to Repub­li­cans, who re­sponded with at least mea­sured ap­proval.

With un­cer­tain eco­nomic fu­tures for both the state and the na­tion, Cal­i­for­nia shouldn’t over­com­mit to new pro­grams, said As­sem­bly Repub­li­can leader Marie Wal­dron of Es­con­dido (San Diego County). “I ap­plaud the gov­er­nor’s de­ci­sion to in­crease our re­serves and pay down a por­tion of the state’s wall of debt,” she said.

Although he led his pre­sen­ta­tion with Brown-like fru­gal­ity, New­som saved much of his en­thu­si­asm for the type of so­cial pro­gram im­prove­ments that his pre­de­ces­sor was re­luc­tant to fund.

People on the state wel­fare pro­gram known as CalWORKS would see their monthly checks rise dra­mat­i­cally, mak­ing Cal­i­for­nia’s pay­ments more than $100 higher than those in any other state. Col­lege stu­dents with young chil­dren could see their Cal Grant awards triple. The amount of state money avail­able for tax cred­its for low-in­come work­ing fam­i­lies would rise from $400 mil­lion to $1 bil­lion, with fam­i­lies with young chil­dren get­ting an ad­di­tional $500.

Then there’s the ad­di­tional $260 mil­lion to pro­vide Medi-Cal ben­e­fits to adults ages 19 to 25, re­gard­less of im­mi­gra­tion sta­tus.

Those mea­sures brought cheers from pro­gres­sive in­ter­est groups.

“The chil­dren of Cal­i­for­nia have a cham­pion in the gov­er­nor’s of­fice,” said James Steyer of Com­mon Sense Kids Ac­tion, which wants to see greater ac­cess to early ed­u­ca­tion and health care. “This is an ex­cit­ing time for ad­vo­cates of chil­dren’s eq­uity.”

That support was echoed by groups fo­cus­ing on ed­u­ca­tion, poverty, home­less­ness and other so­cial is­sues.

The bud­get also sug­gests that New­som is chan­nel­ing the pre­vi­ous gov­er­nor by avoid­ing po­lit­i­cal fights he can’t win — at least for now.

But in many of those cases, the new gov­er­nor not only reaf­firmed his support for some ex­tremely in­no­va­tive — and ex­tremely ex­pen­sive — pro­grams he called for dur­ing the cam­paign, but also took the first steps to­ward mak­ing them hap­pen.

New­som said, for ex­am­ple, that the state would seek to pro­vide six months of paid leave for new and adop­tive par­ents.

“We’re com­mit­ted to this, not just in­ter­ested,” he said.

But the gov­er­nor ad­mit­ted that the fund­ing is not there. He said he would con­vene a task force to con­sider ways to pay for a phased-in ex­pan­sion of the state’s cur­rent fam­ily leave pro­gram, which provides up to six weeks of paid time off.

Sim­i­larly, free preschool for all 4-year-olds was a top cam­paign is­sue for New­som and has long had the en­thu­si­as­tic back­ing of many Demo­cratic lead­ers, although not from Brown. But that pro­gram will cost more than $2 bil­lion a year, with the price ris­ing if 3-year-olds are in­cluded, as New­som has suggested.

So in this bud­get, the gov­er­nor calls only for ex­pand­ing ac­cess to ex­ist­ing pro­grams for 4-year-olds from low­in­come fam­i­lies, and de­vel­op­ing a plan to pro­vide and pay for uni­ver­sal preschool, push­ing that bud­get fight into the fu­ture.

For months, New­som has been tamp­ing down ex­pec­ta­tions on uni­ver­sal health care, a sig­na­ture is­sue for him and many pro­gres­sive Democrats. Many in the party’s left wing want a sin­gle-payer model, in which the state would be the sole or­ga­nizer of health care de­liv­ery.

The cost of that would be huge, how­ever, and New­som has cau­tioned that it would be years in the mak­ing. In the mean­time, though, he wants to make many more Cal­i­for­ni­ans el­i­gi­ble for state-sub­si­dized health in­sur­ance, an early step to­ward uni­ver­sal cov­er­age.

“There’s al­ways a bit of a risk in­tro­duc­ing some­thing as a ‘down pay­ment’ or a ‘one-time ex­pense,’ since a lot of people don’t look at the fine print” and as­sume the pro­gram is guar­an­teed for the fu­ture, said So­nen­shein of the Brown In­sti­tute. “But there’s tremen­dous in­ter­est in sin­gle-payer among pro­gres­sives, so New­som had to get in some­thing to show that it’s mov­ing ahead.”

De­spite New­som’s as­sur­ance that he has worked closely with leg­isla­tive lead­ers and that the bud­get “re­flects their pri­or­i­ties and not just mine,” the Jan­uary spend­ing plan is the start­ing point, not the fin­ish line. Be­tween now and the June 15 bud­get dead­line, there will be lots of im­pas­sioned backand-forth be­tween the gov­er­nor and leg­is­la­tors seek­ing money for their own pet projects.

“New­som did a good job rolling out his vi­sion for Cal­i­for­nia, but he can’t do ev­ery­thing,” So­nen­shein said. “Now he will have to de­cide which of his pro­grams he re­ally wants to fight for and what goes into sec­ond place.”

Rich Pe­dron­celli / As­so­ci­ated Press

Gov. Gavin New­som presents his first bud­get, a $209 bil­lion blue­print with many one-time ex­pen­di­tures.

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