California Gov. Gavin Newsom announced a budget proposal Friday that includes more than $14 billion for coronavirus relief efforts. (Kent Nishimura / Los Angeles Times)

California Gov. Gavin Newsom announced a budget proposal Friday that includes more than $14 billion for coronavirus relief efforts. (Kent Nishimura / Los Angeles Times)

Newsom’s state budget earmarks billions in COVID-19 help for workers and schools

John Myers

Los Angeles Times

Gov. Gavin Newsom sent a budget to the California Legislature on Friday that calls for a swift and expansive boost in the state government’s response to the COVID-19 pandemic, earmarking much of an unallocated tax revenue windfall for efforts to help workers and businesses, boost public health and speed up the reopening of public school classrooms.

In all, the proposal dedicates more than $14 billion to coronavirus relief efforts in healthcare, economic stimulus and education programs. Newsom urged lawmakers to take action on the most pressing issues — including an extension of the state’s moratorium on evictions and funding for California’s COVID-19 vaccination efforts — by the end of the month.

“Our budget, understandably, represents and reflects the realities of this recession, and the realities of this pandemic-induced reality,” Newsom said during a budget presentation in Sacramento.

The centerpiece of the governor’s economic stimulus plan — a $4.5-billion blueprint announced on Wednesday — would provide cash infusions to existing state programs that offer tax credits to businesses and apprenticeship programs affiliated with community colleges. Money would also go toward expediting housing construction in urban and neighborhood settings, and subsidies for low-income Californians to purchase zero-emissions cars and trucks. An additional $500 million would be available for tax credits to encourage the creation of additional housing for low-income Californians.

Newsom has also proposed cash payments of $600 to the state’s lowest-wage workers, to be distributed in February and March and estimated to cost $2.4 billion. His budget plan also asks lawmakers to fast-track the use of $2.6 billion in federal funds for struggling tenants and new assistance for property owners whose mortgage payments are in jeopardy as a result of unpaid rent.

The budget proposes $300 million to help speed up the distribution of COVID-19 vaccines in California. Funds would be used to implement a state vaccine management system, boost the shipment and storage of vaccine doses, and raise awareness among Californians about when and where to be vaccinated against the virus.

Not all of the governor’s proposals offer additional money to solve pressing problems. The plan he unveiled last week for some of California’s youngest students to return to classrooms in February relies on $2 billion in tax revenues already guaranteed to public schools by the state Constitution. Newsom’s proposal would dole out those dollars differently: School districts that complete COVID-19 safety plans for in-person instruction by Feb. 1 would receive at least $450 and up to $800 per student for pandemic-related needs — even if local virus transmission rates are too high for students to return next month.

Schools that don’t complete the planning process until March 1 will receive smaller per-pupil grants. The plan would require participating public schools to offer all elementary school students the option to attend at least some classes on campus by mid-March if public health conditions permit it.

Newsom said Friday that the school reopening deadlines can’t be met if the Legislature doesn’t take action on the plan this month. Even then, school district officials could find the governor’s timeline to be challenging. One large hurdle could be that the reopening plans must have the endorsement of the local labor unions representing teachers and school employees.

Schools would also be encouraged to offer new summer programs and additional efforts to lessen the blow from learning setbacks caused by remote schooling. In all, Newsom’s plan sets aside $4.6 billion for those services.

The various proposals unveiled Friday cover both a revision of the existing budget the governor signed into law last summer and his $227.2-billion spending proposal for the fiscal year that begins on July 1. Lawmakers have a larger opportunity this year for a course correction at the midpoint of the current budget cycle, the result of several sectors of the California economy faring better than expected during the first nine months of the public health crisis.

When lawmakers adopted a tax revenue forecast last spring, the expectation was that an unprecedented number of Californians might lose their jobs, with many of them seeking help from the state’s health and human services programs. Unemployment rose sharply through much of 2020, but millions of middle-class and high-wage workers were able to keep their jobs and work from home. Tax collections also rose after the robust stock market boosted capital gains earned by the state’s wealthiest taxpayers.

Monthly tax collections through last summer and fall consistently beat expectations. In November, independent legislative analysts predicted last year’s overly pessimistic budget projections could result in as much as $26 billion in unexpected cash for state programs. Newsom’s budget largely agrees with the legislative forecast but assumes that some of the money will be used to fund social safety net programs and to replenish California’s cash reserves.

Democratic legislative leaders applauded Newsom’s budget plan, promising to take up its most pressing provisions soon. Lawmakers delayed their return to Sacramento until next week due to the surge in new COVID-19 cases across the capital region as well as Southern California, the Bay Area and the San Joaquin Valley. Last year, public health concerns forced the cancellation of several weeks of legislative activity. Similar conditions this year could make the timeline set out in Newsom’s budget plan difficult, if not impossible, to achieve.

This story originally appeared in Los Angeles Times.

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