Gov. Gavin Newsom sounded upbeat when he announced at a press briefing Friday afternoon that he has submitted a $227 billion budget for the 2021-22 fiscal year to the State Legislature for approval.
The spending plan reflects a brighter picture than the gloomier one Newsom presented last summer when he projected a steep budget shortfall of more than $50 billion. In this proposal, the governor’s office is estimating that there will be a budget surplus of about $15 billion over the 2020-21 fiscal year, with nearly $3 billion stashed in the state’s operating reserve.
“In these darkest moments of the COVID-19 pandemic, this budget will help Californians with urgent action to address our immediate challenges and build towards our recovery,” said Newsom. “As always, our Budget is built on our core California values of inclusion, economic growth and a brighter future for all.”
The proposal includes significant investments intended to shore up and revive the state economy battered by the COVID-19 global pandemic. It proposes $2.4 billion for a one-time payout of $600 per individual from the “Golden State Stimulus” fund for the lowest earning Californians, many of them essential workers, who have been hit hardest by the global health crisis and the economic dip it caused. The majority of workers that have been affected are African American, Hispanic or from other ethnic groups in California and across the country.
To ensure a swift economic recovery, the governor has allocated $372 million to facilitate the distribution and administration of COVID-19 vaccines across the state.
Sen. Steven Bradford (D-Los Angeles), chair of the California Legislative Black Caucus and the only African American lawmaker in the upper house of the California legislature, says he is pleased that the governor’s budget invests in equity. He told CBM that he will work with the governor’s office to make sure the proposals in the plan, particularly the relief for businesses, benefit Black Californians.
“Governor Newsom’s 2021-2022 budget proposal reflects what we are all hoping: that things are getting back on track and in a better way. The COVID-19 pandemic continues to devastate California, but thanks to the swift actions taken last year by the Legislature and the Governor, we are in a strong position to combat this crisis and rebuild our economy,” Bradford said
“We do not want to go back to where we were. We want a more just economy moving forward,” the senator added.
Workers at hospitals, grocery store clerks, public transportation operators and more had to continue showing up to work through the most difficult and uncertain phases of the pandemic last year. And entrepreneurs like barbers and beauticians and workers in retail, food and beverage service, hospitality and the leisure sectors suffered the most job losses. Newsom announced $777.5 billion in his budget for economic recovery, including assistance to businesses of all sizes – more than $500 million will go to small businesses — and money to support the state’s minimum wage increase to $14.
Bradford, who is also chair of the Senate Public Safety Committee, applauded Gov Newsom for including funding for improving prisons and criminal justice reform efforts.
“As Chair of the Senate Public Safety Committee, I am also pleased to see funding for the maintenance of California state prisons, Los Angeles County, use of force investigations by the Department of Justice, and rehabilitation and educational programs for our inmate population,” he said. “Following the work I began in 2018 with the California Cannabis Equity Act, I am delighted to see the permanent funding of the state’s local equity grant program, which is a momentous step toward a fair and equitable cannabis market.”
The money for COVID economic recovery comes at a time when there looms the threat of another economic downturn. According to numbers released by the U.S. Department of Labor Friday, payrolls across the country decreased by 140,000 jobs in December. It is the sharpest drop in jobs since last April. The economy has not fully bounced back since the beginning of the pandemic last march when it lost 22.2 million jobs. Only 12.4 million jobs have been recovered so far.
Although the governor’s budget projects optimism, and it provides substantial funding for critical ongoing government priorities like education, transportation public safety, higher education, health care and green initiatives, it is short on details. It does however include a clear high-level breakdown of where the money will be spent – if not exactly how. For example, Gov. Newsom calls for $2 billion to help schools across the state to reopen in the next couple of months. The budget also allots $85.8 billion for schools, which includes teacher training, early childhood education programs, teacher recruitment and money to extend learning into the summer. The governor is also proposing that the state invests $500 million in low-cost housing tax credits; $1.75 billion to continue purchasing motels to house the homeless under “Project Room Key;” and $353 million for job training and creation programs.
Over the next 5 months, Gov. Newsom says he and the Legislature will be working to hash out, distill and define budget priorities. Through the process, they will determine how and at which level of government – state, county or municipal – the monies will be spent. Then in May, he will present his revised, and more detailed, budget to the legislature for final approval before the fiscal year begins in July.
Senate Republicans say over 19,000 small businesses in the state have had to shutter since the pandemic began. Therefore, they are urging the governor to increase funding for them.
“Over the past ten months, the Governor’s shutdowns and COVID-19 challenges have made it difficult for millions of Californians,” said Senate Republican Leader Shannon Grove (R-Bakersfield) and Senator Jim Nielsen (R-Tehama) in a statement responding to the governor’s budget.
Some environmental groups complained that the budget redirects cash to emergency preparedness, “short-changing” programs that provide funding to underserved communities, some of them places where Black Californians live.
“The Greenhouse Gas Reduction Fund is meant to cut pollution in our most impacted communities,” said CEO Debra Gore-Mann, president of the Greenlighting Institute, a public policy and research organization based in Oakland. “Funding for wildfires should come from the utilities whose recklessness led to so many problems.
Gov. Newsom says now that he has presented his budget, the hard work begins.
“The Budget makes progress towards the goal I set when taking office to harness California’s spirit of innovation and resilience and put the California Dream within reach of more Californians,” Gov. Newsom said.
