Aldon Thomas Stiles | California Black Media| January 16, 2023
On Tuesday Jan. 10, at a press conference held in Sacramento, Gov. Gavin Newsom presented his first draft of the state’s 2023-2024 budget to the Legislature.
The proposal, which totaled $223.6 billion, is the first spending plan developed under the supervision of Joe Stephenshaw, the first Black director of the California Department of Finance. The state’s budget for the next fiscal year presents a more modest outlook than last year’s, which totaled $240 billion.
In his presentation, Newsom assured Californians that the state has $35.6 billion in reserves, which the governor says he intends not to touch.
Stephenshaw, who took the podium after the governor, explained that the decrease in the budget and the decision not to tap into the reserves are not actions taken in anticipation of an impending recession.
Instead, he said, the state is practicing “moderation” due to witnessing “slower growth” revenues than was expected last year.
An assessment of Newsom’s budget proposal by the independent Legislative Analyst’s Office (LAO) determined that a recession is not an unlikely possibility and praised the proposed budget for making financial sense.
“Notably, the Governor does not propose using any reserves,” LAO’s statement read. “This approach is prudent given the downside risk to revenues posed by the current heightened risk of recession.
The statement also cautioned lawmakers.
“We recommend the Legislature maintain this approach during its own planning process,” the statement continued.
Sen. Steve Bradford (D-Gardena), vice chair of the California Legislative Black Caucus (CLBC) said the state’s more cautious spending plan for the next fiscal year is a “step in the right direction” but promised to continue to fight to fund priorities that are critical for California’s most “marginalized” and “vulnerable” communities.
“As many Californians are struggling to pay for groceries, housing, and gas, the state faces its own money concerns. A projected budget shortfall of about $24 billion will challenge the Legislature and the Governor to ensure our investments will provide services to those Californians who need them the most,” he observed.
“I look forward to the budget process and will work to make sure any adjustments to investments in jobs, healthcare, education and public safety are viewed under a lens of equity,” Bradford added.
Some observers praised the Newsom’s draft budget because it did not come with new taxes.
“I was pleased to see that taxes are not part of the new state budget,” Assemblymember James C. Ramos (D-Highland)
said in a statement released by his office on the day of the announcement.
“Even though California faces a budget deficit, we will continue moving forward to improve education, reduce homelessness, and combat fentanyl use, especially among our children and youth to ensure public safety and economic development in the face of threats from flooding, wildfires, drought, and other climate extremes,” Ramos promised.
The budget proposal focuses heavily on education, with provisions for public schools, colleges, universities and other academic support, accounting for about 46% of the general fund.
About 36.3% is allotted to K-12 education and 10.1% is earmarked for higher education.
Chair of the CLBC Lori Wilson (D-Suisun City) praised Newsom for specifically committing $300 million to K-12 education to close the academic achievement gap of low-income students.
“Thank you, Governor @GavinNewsom for including this funding in the budget and shout out to my colleague Asm. Akilah Weber, MD, for her tireless work on this issue,” Wilson tweeted.
Some Republican lawmakers issued brisk criticisms of Newsom’s spending plan and Democrats’ endorsement of it.
“Democrat politicians have wasted a record surplus on new social programs and pork projects, while allowing our aging infrastructure to crumble. Now, we are faced with a $22 billion deficit as a result of their fiscal recklessness. It’s high time we refocus our budget on the core functions of government,” said Assembly Republican Leader James Gallagher (D-Yuba City).
“As California bounces between flooding and drought, it is abundantly clear that we need new water storage, and yet there is still no dedicated funding this year or next to meet that need. Instead, the Governor protects failed programs that haven’t made a dent our state’s highest-in-the-nation poverty rate.”
In his presentation, Newsom evoked Proposition 98 which requires a minimum funding level for community colleges and other schools.
After education, the second-highest funded priority is health services and initiatives at 23.4% of total spending.
If the Legislature approves, some of the monies for health funding will go toward mental health for programs like CARE Court and CalAim.
There are also funds dedicated to reproductive care.
In a statement, Planned Parenthood Affiliates of California stood behind the governor’s decision.
“Maintaining and pursuing new investments is critical in the pursuit of accessibility and equity for California patients and those forced to seek care here,” the statement read.
Another 8.6% of the budget will go toward human services, 4.3% will go to natural resources, and 10.7% will go to other efforts.
“With our state and nation facing economic headwinds, this budget keeps the state on solid economic footing while continuing to invest in Californians,” said Newsom.
Assemblymember Tina McKinnor (D-Inglewood) – also a member of the CLBC – expressed her support on Twitter.
“Governor Newsom’s proposed 2023-24 state budget preserves a lot of the progress we’ve made over the past few years and helps navigate short term fiscal issues while maintaining our long-term vision for CA,” she tweeted.
During the press conference, Newsom indicated that he believes continued investments in things like universal healthcare will bring about radical change for the state.
Over the next five months, the Governor and the Legislature will work to hash out their differences and present an updated draft proposal, commonly known as the “May Revise.”
By law, Legislators have until June 15 to approve the final budget, which takes effect July 1.
Governor Newsom Signs Budget Putting Money Back in Californians’ Pockets and Investing in State’s Future
Published: Jun 30, 2022
SACRAMENTO – Governor Gavin Newsom today signed a $308 billion state budget that provides direct tax refunds for 23 million Californians to help address rising costs, tackles the state’s most pressing needs, builds our reserves, and invests in California’s future.
Here are the top 10 things you need to know about the budget:
1. “Cha-ching! You just received a deposit.”
Global inflation. Rising costs. It’s hard out there and we know it. So, we’re giving you $9.5 billion back. MILLIONS of Californians– 23 million to be exact – will benefit from up to $1,050, as soon as October! See if you qualify on the new Middle-Class Tax Refund calculator here.
2. Don’t go into crippling debt over a hospital visit
Want health care? We’re now the FIRST and ONLY state in the nation that offers universal access to health care coverage, regardless of your immigration status. Want insulin? California will be producing our own insulin to make it cheaper and more affordable for everyone.
3. A real “Pro-life” agenda
Fun fact – California is actually a pro-life state. We’re protecting reproductive freedoms and supporting Californians throughout their lives. In this budget, we’re investing over $200 million in reproductive care. We’re making a company’s willingness to move OUT of anti-choice states and TO the reproductive freedom state of California a factor in awarding state business tax credits. But we’re not stopping at reproductive care. We’re investing in a child’s entire lifespan. From birth to college and beyond. That means universal preschool, free school meals, expanded before and after school programs, more counselors for our schools, free community college, the list goes on.
4. Climate change is real y’all
While SCOTUS is kneecapping the federal EPA’s ability to fight climate change, California is making a climate commitment on the scale of what other countries are spending. Our $53.9 billion in new investments will better protect Californians from the extreme weather that has been impacting our bills, our livelihoods, our farms and our families. We’re investing in fire protection and drought response while forging an oil-free future away from big polluters, and more. Later is too late and we will act now so our kids and grandkids have a brighter, cleaner future.
5. Getting people into housing & shelter and off the streets
We are making major investments to address California’s homelessness crisis by getting people into housing & shelter. We have $2.2 billion for encampment resolutions around the state and new bridge housing to support people going through CARE Court – tens of thousands of people with a safe roof over their head and the mental health and substance use help many desperately need.
6. Keeping the lights on
California has an energy plan. Drought is causing lower energy production. Extreme heat is causing increased energy demand. Wildfires threaten energy infrastructure. So, we’re investing $4.3 BILLION to help keep the lights on this summer, invest in clean and reliable energy infrastructure, help with your energy bills, accelerate our transition to clean energy and so much more. We’re building the energy system of the future.
7. A real public safety plan
Californians should always feel safe — whether that’s at home, at the park, or at work. California is tackling the root causes of crime and getting guns and drugs off our streets. The state is launching the largest gun buyback program in the nation, funding a permanent Smash and Grab Enforcement Unit to fight retail theft, and investing $30 million to support the National Guard’s drug interdiction efforts, targeting transnational criminal organizations.
8. Literally transforming education in our state
It’s no longer K-12, it’s Pre-K -16. We are investing a – truly – historic $170 billion to continue our transformation of education in California. From our master plan for early learning to free community college, education has never been more accessible in our state. NEW this year, we have $7.9 billion to help with learning recovery, more investments in higher education, an additional $2 billion for affordable student housing (on top of last year’s $2 billion), and $3.5 billion that schools can use on arts, music, and more.
9. Getting our kids help with mental health
After these last few years, everyone knows we are experiencing a mental health crisis and California is taking it seriously. We’re investing big in behavioral health for adults and our kids. This year, there’s new urgent funding for wellness support programs, funding for youth suicide reporting and prevention, and more.
10. Rebuilding California
Railroads. Highways. Streets. We’re investing in infrastructure! This budget includes a $14.8 BILLION transportation infrastructure investment. That means money for rail and transit projects, climate adaptation projects, walking and bicycling projects, high-speed rail, our ports, and more. AND we’re investing to speed up our transition to zero-emission vehicles. Beep beep!
“In the face of new challenges and uncertainties, we’re providing over $17 billion in relief to help families make ends meet, and doubling down on our investments to keep building the California Dream on a strong fiscal foundation,” said Governor Newsom. “This budget invests in our core values at a pivotal moment, safeguarding women’s right to choose, expanding health care access to all and supporting the most vulnerable among us while shoring up our future with funds to combat the climate crisis, bolster our energy grid, transform our schools and protect communities. Building a better future for all, we’ll continue to model what progressive and responsible governance can look like, the California way.”
Amid record rates of inflation and economic uncertainty on the horizon, the budget continues to build resiliency with $37.2 billion in budgetary reserves and 93 percent of the discretionary surplus allocated for one-time projects.
Additional details include:
$17 Billion Inflation Relief Package
$9.5 Billion for Tax Refunds to Help Address Inflation: The budget provides tax refunds of up to $1,050 for 23 million Californians to help offset rising prices.
$1.95 Billion for Emergency Rental Assistance: The budget provides additional funds to ensure qualified low-income tenants who requested rental assistance before March 31 get the support they need.
$1.4 Billion to Help Californians Pay Past-Due Utility Bills: Expanding on last year’s utility relief program, the budget provides funds to continue covering past-due electricity and water bills.
$439 Million to Pause the State Sales Tax on Diesel for 12 Months: Bringing relief to the commercial sector and drivers, the budget includes a pause of the General Fund (3.9375 percent rate) portion of the sales tax rate on diesel fuel that will provide an estimated $439 million in relief.
$53.9 Billion California Climate Commitment
New investments in this year’s budget bring California’s multi-year climate commitment to $53.9 billion to protect Californians from the impacts of climate change, help forge an oil-free future and tackle pollution.
Drought and Water Resilience: Building on last year’s $5.2 billion commitment to ensure water security for Californians, the budget invests another $2.8 billion for near- and long-term actions to build water resilience, promote conservation and more.
Fighting Wildfires: $2.7 billion investment to reduce the risk of catastrophic wildfires and bolster forest health. These projects include forest thinning, prescribed burns, grazing, reforestation, and fuel breaks.
Accelerating the Zero-Emission Vehicle (ZEV) Transition: Building on last year’s unprecedented ZEV package, the budget invests an additional $6.1 billion to create a total $10 billion package to expand ZEV access and affordability and support the build-out of infrastructure across the state.
Bolstering our Energy System: Allocates $4.3 billion to support energy reliability, provides relief to ratepayers, creates strategic energy reserves and accelerates clean energy projects. Allocates an additional $3.8 billion for clean energy projects to boost affordability and reliability.
$14.8 billion for regional transit, rail and ports projects to support the continued development of clean transportation projects, including California’s first-in-the-nation high-speed rail system and bicycle and pedestrian projects.
Expanding Health Care Access
Health Care Access for All: With this budget, California becomes the first state in the nation to provide universal access to affordable health coverage for lower-income individuals by providing coverage for Californians ages 26 to 49, regardless of immigration status. It also establishes the Office of Health Care Affordability to develop cost targets for the health care industry and impose consequences if they are not met.
Reproductive Health Care: As other states restrict access to this critical care, California is providing more than $200 million for grants and services for reproductive health care providers in order to expand access, improve clinical infrastructure and more to prepare for the expected influx of women from out of state seeking care.
Transforming the Children’s Behavioral Health System: Building on the $1.4 billion investment in last year’s budget to transform California’s behavioral health system for all children, the budget includes an additional $290 million over three years to address urgent needs, including funding for programs that promote well-being and grants to support children and youth at increased risk of suicide and a youth suicide crisis response pilot.
Affordable Insulin: The budget invests $100 million to develop and manufacture low-cost biosimilar insulin products to increase insulin availability and affordability in California.
Confronting Homelessness and the Mental Health Crisis
Additional $3.4 Billion General Fund over two years to build on last year’s $12 billion multi-year investment by continuing progress on expanding behavioral health housing, encampment cleanup grants and support for local government efforts.
Supporting the CARE Court framework to assist people living with untreated mental health and substance abuse disorders, the budget includes funds for state department and Judicial Branch costs associated with the proposal.
Combatting COVID-19: The budget adds $1.8 billion to continue implementing the state’s SMARTER plan, including more funding to support school testing, increase vaccination rates and more. The budget also invests $300 million General Fund for CDPH and local health jurisdictions to permanently expand the state’s capacity to protect public health and promote health equity.
Tackling Crime: The budget expands CHP’s retail theft task force and includes funding for the Attorney General to prosecute organized retail theft crimes, lead anti-crime task forces throughout the state, and establish a new Fentanyl Enforcement Program. Additionally, the budget expands fentanyl drug interdiction efforts led by the California Military Department.
The inflation relief package builds on Governor Newsom’s nation-leading stimulus package last year to accelerate California’s economic recovery with Golden State Stimulus checks for two out of every three Californians, as well as the largest statewide renter and utility assistance program and small businesses relief program in the country.
The budget and related budget-implementing legislation signed by the Governor today include:
- AB 178 by Assemblymember Philip Ting (D-San Francisco) – Budget Act of 2022.
- AB 180 by Assemblymember Philip Ting (D-San Francisco) – Budget Act of 2021.
- AB 181 by the Committee on Budget – Education finance: education omnibus budget trailer bill.
- AB 182 by the Committee on Budget – COVID-19 emergency response: Learning Recovery Emergency Fund: appropriation.
- AB 183 by the Committee on Budget – Higher education trailer bill.
- AB 186 by the Committee on Budget – Public health.
- AB 192 by the Committee on Budget – Better for Families Tax Refund.
- AB 194 by the Committee on Budget – Taxation.
- AB 195 by the Committee on Budget – Cannabis.
- AB 199 by the Committee on Budget – Courts.
- AB 200 by the Committee on Budget – Public safety omnibus.
- AB 202 by the Committee on Budget – County jail financing.
- AB 203 by the Committee on Budget – Public resources.
- AB 205 by the Committee on Budget – Energy. A signing message can be found here.
- AB 210 by the Committee on Budget – Early childhood: childcare and education.
- SB 125 by the Committee on Budget and Fiscal Review – Public resources: geothermal resources: lithium.
- SB 130 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Units 5, 6, 7, and 8: agreements.
- SB 131 by the Committee on Budget and Fiscal Review – November 8, 2022, statewide general election: ballot measures.
- SB 132 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Units 16 and 18: agreements.
- SB 184 by the Committee on Budget and Fiscal Review – Health.
- SB 187 by the Committee on Budget and Fiscal Review – Human services.
- SB 188 by the Committee on Budget and Fiscal Review – Developmental services omnibus.
- SB 189 by the Committee on Budget and Fiscal Review – State Government.
- SB 191 by the Committee on Budget and Fiscal Review – Employment.
- SB 193 by the Committee on Budget and Fiscal Review – Economic development: grant programs and other financial assistance.
- SB 196 by the Committee on Budget and Fiscal Review – State employment: State Bargaining Units: agreements.
- SB 197 by the Committee on Budget and Fiscal Review – Housing.
- SB 198 by the Committee on Budget and Fiscal Review – Transportation.
- SB 201 by the Committee on Budget and Fiscal Review – Taxation: Earned Income Tax Credit: Young Child Tax Credit: Foster Youth Tax Credit.
The Governor also announced that he has signed the following bills:
- AB 2724 by Assemblymember Dr. Joaquin Arambula (D-Fresno) – Medi-Cal: alternate health care service plan.
- SB 1355 by Senator Anthony Portantino (D-La Cañada Flintridge) – Claims against the state: appropriation.