Newsom Unveils Grim Budget Proposal

In the wake of an unprecedented $54.3 billion shortfall, Gov. Gavin Newsom has proposed slashing billions of dollars from California’s budget. The state is looking to abandon a number of programs for schools, the environment, and healthcare that were proposed just a few months ago — in a world that looked very different from the one we’re living in today.

“Nothing breaks my heart more than budget cuts,” Newsom said Thursday as he unveiled his revised spending plan. The coronavirus has upended California’s economy. Revenues are projected to decline over $41 billion and unemployment is expected to swell to 24.5%. Before the pandemic, California had a $5.6 billion projected surplus and record low unemployment.

Schools and colleges are looking at a loss of $19 billion compared to what was proposed in January. Cuts to local funding total 10%. 

In addition to LCFF reductions, after-school programs would receive a $100-million hit. Programs to address teacher shortages would also take a major cut, along with massive reductions for early childhood education programs and childcare. The revision, however, prioritizes $4.4 billion in federal funding to address student learning loss caused by the shutdown.

In addition, the May revise calls for canceling $2.4 billion in extra payments to the California Public Employees’ Retirement System, slashing state worker pay, and temporarily suspending/capping tax credits used by businesses. It proposes drawing $16.2 billion from reserves over the next three years, including $8.3 billion this year.

On the homelessness/housing front, it’s more of a mixed bag. You can read about what’s being scrapped and what’s being salvaged here.

Newsom said the CARES Act will help cover 15% of the state's deficit. But he called on the federal government to do much more.

“The federal government has a moral and ethical and economic obligation to help support the states,” he said. “After all, what is the point of government, if not to protect people, our safety and the wellbeing of citizens?”

Newsom also told CNN that police and firefighters would be the first to be laid off by cities and counties if they don’t get the kind of help they need from Washington.

“The next time [Republican lawmakers] want to salute and celebrate our heroes, our first responders, our police officers and firefighters, consider the fact that they are the first ones that will be laid off by cities and counties. Folks that are out there, the true heroes of this pandemic, our health care workers and nurses. Those county health systems have been ravaged, their budgets have been devastated and depleted, the budget counts depleted since this pandemic. They're the first ones to be laid off. So we've got to square our rhetoric with the reality."

To see all of what Newsom is proposing, you can read a summary of the governor's revised budget proposal here and this press release from the governor’s office.