California Gov. Gavin Newsom unveiled a $209 billion budget on Thursday that boosts funding for public schools and health care programs and includes significant one-time spending to combat the state’s homelessness epidemic and prepare for future natural disasters.
“I know it’s rote and cliche to say it’s a reflection of our values, but it is a reflection of our values,” Newsom said at a news conference in Sacramento. “It is demonstrable that these dollars attach to real people and real people’s lives.”
The governor promised to balance his ambitious campaign platform with the need to protect California’s finances in the event of an economic slide. The spending in his proposal reflects that approach. Much of it would not be for ongoing services, a page borrowed from the playbook of his predecessor, Gov. Jerry Brown.
“The message we are advancing here is discipline,” Newsom said.
The plan sent to the Legislature for the fiscal year that begins in July seeks a 4 percent boost in the state’s general fund spending over current levels. Some increases were expected _ the budget is built on a series of mandates that earmark revenues or programs where costs are determined by the number of eligible Californians who enroll. Almost all of the projected $2.3 billion in higher state spending for schools, for example, is driven by California’s constitutional requirement governing education finance.
But other key spending proposals suggest the new Democratic governor views his victory last November as a clear mandate to pursue an expansive agenda that will focus first on efforts aimed at young children and poor families.
“At a time where folks seem to be backing away, we’re going to lean in” to fund social services programs, Newsom said.
Newsom’s budget proposes a $1 billion “working families tax credit,” more than double the size of the state’s existing tax break for low-income workers. The budget would noticeably expand eligibility for the tax break to those who earn up to $15 an hour, estimated by the administration to add up to 400,000 additional families.
The governor also will ask lawmakers to increase monthly welfare assistance grants under the state’s CalWORKS program, building on an effort led by lawmakers over the past two years.
Efforts to help ease California’s housing and homelessness crises would also be bolstered under the spending plan, with $500 million to be set aside to help local governments build shelters and add services to help the homeless.
A number of proposals in the new governor’s budget reflect relatively small, targeted infusions of cash. The Newsom administration believes those initiatives will provide a foundation for new or expanded services, many of which would need to be funded over the course of several years.
Some of the phased-in efforts were outlined in the days leading up to Newsom’s inauguration on Monday. The governor will ask lawmakers to spend $1.8 billion, mostly in one-time expenses, to improve early childhood education and encourage more schools to provide full-day kindergarten. He will also ask for early steps toward a sweeping expansion of California’s paid family leave for new parents. And Newsom has embraced calls for a second year of tuition-free community college for any student who wants it, a $40-million proposal that builds on existing law that covers costs for the first year.
The budget also offers details on a promise Newsom made hours after taking the oath of office: full access to Medi-Cal, the state’s low-income healthcare program, for anyone up to age 26 who is in the U.S. illegally. Those who are 19 or younger are already covered and the budget proposal, which would be the first of its kind in the nation, puts the estimated cost for the first year at $260 million, dollars that must come from the state given federal restrictions based on immigration status.
Even without federal funding, the effort has drawn the ire of conservative lawmakers. On Tuesday, U.S. Sen. Bill Cassidy, R-La., vowed to lead an effort in Washington to block Newsom from expanding health care access to more immigrants without legal status. Cassidy tweeted that California shouldn’t use “American citizens’ money” for the effort. Newsom fired back on Twitter that health care should be a “basic right.”
The governor is also proposing to help some of the communities devastated by recent wildfires, including a payback of lost property tax revenues when homes were destroyed.
The long list of new ideas is made possible by a continued strong economy, marking the seventh consecutive year in which tax revenue collections are expected to outpace official estimates. It is a remarkable run in a state where deficit-plagued budgets were once commonplace, helping plunge credit ratings and voter approval of lawmakers to historic lows.
Newsom’s budget would add more money to the state’s “rainy day” reserve fund. Voters expanded the fund through a 2014 ballot measure and imposed strict rules on how it can be spent. The governor seeks to sock away up to almost $20 billion in the fund by the end of his four-year term. The balance is projected to hit $15 billion by next summer.
But the more that Newsom and Democratic lawmakers rely on the unrestricted reserves, the higher the stakes for their progressive policy agenda. Analysts have pointed out that if the national economy continues to produce solid results through this summer, it will tie the record _ 10 years _ for the longest recovery in modern history, double the length of average economic expansions.
Last month, officials reported the state’s unemployment rate remained low at 4.1 percent, with more than 3 million California jobs created since the beginning of the current economic upswing.
Whether Newsom insists on a strategy different from that of Brown, who generally offered plans built on more cautious revenue predictions, is a decision that will be watched closely. The new governor will get his best chance to set the state’s fiscal agenda in
May, when his revised budget will take into account tax payments made by millions of Californians by April 15.
-By John Myers, Los Angeles Times