Gov. Newsom’s 2020 Budget, ‘Unprecedented, Historic,’ ‘Once-in-a-Generation’

We’re over ‘California derangement syndrome’

~Gov. Gavin Newsom

Governor Gavin Newsom’s 2020 budget plans to increase overall spending to a historic high of $222 billion.

Newsom’s original 2019 budget was $209 billion budget, an $8 billion, four percent increase from the 2018-19 budget. By the May revise, his budget was bumped up to $215 billion.

When Gov. Jerry Brown returned to office in 2011, his state budget was $98 billion, and increased to $200 billion by 2018. This was a 110 percent increase in eight years, with a population increase of just three million.

There is no end in sight to California’s record spending.

In his 2019 Inaugural Address, Gov. Gavin Newsom called for a Marshall Plan to end homelessness in California. Homelessness is likely the single most important issue in the budget at this point, as many officials and physicians are warning of serious disease epidemics and infectious disease outbreaks, because of the filth people are living in on the streets, and the human waste allowed to flow into California’s rivers.

In 2019, Newsom said he committed over $1 billion toward homelessness. However, the money was not “released.”

In his 2020 Budget Briefing Friday, Newsom said numerous times his budget was “unprecedented, historic, once-in-a-generation.”

“We put $650 million emergency grants to cities and counties,” but he admitted the state did not release the money to cities and counties.

“The $650 million hasn’t gone to cities and counties yet – but it’s going out as we speak. This is unprecedented in California history,” Newsom said. “The money is finally going out on homelessness.”

He said the state has committed trailers and medical tents, “but we need to focus on permanency. This means regionalizing our administration. It needs more accountability at the local level.”

“You’ll start seeing real progress in the next few months,” Newsom said. “Mobile tents, medical units, FEMA trailers… as early as next week.”

One reporter said, “the President been critical of you and the state, and said he may come in and do something.”

“He’s Tweeting, we’re doing something about it,” Newsom responded. “The real energy is at the local level.”

“I’m the Homeless Czar in the State of California,” Newsom added. “We’re going to start hitting on all cylinders.”

“We don’t need Donald Trump.”

Again, treating the homelessness problem as housing problem, Newsom said he is creating a $750 million housing and services fund. “We’re going to engage landlords directly. It will be the first in the nation. It’s not without its administrative hurdles. There’s going to be a multi-year effort to begin to leverage each other, as opposed to leverage from each other. We will force and compel partnerships.”

California’s GDP is Higher Than Texas’

Newsom said California has 3.8% GDP growth on average. “It outperforms states like Texas, who are deemed competitors,” Newsom said. However, this does not appear to be accurate.

Newsom Creating New Agencies and Record Spending

“His push to expand Medi-Cal to more undocumented immigrants is a false promise,” said Sen. Andreas Borgeas (R-Fresno). “Expanding such benefits would make it more difficult to provide health care services for current Medi-Cal enrollees.”

“The Governor’s proposed budget increases spending to an alarming $222.2 billion,” said Sen. Borgeas. “We have seen California’s $21.5 billion surplus in Fiscal Year 2019-20 drop to an estimated $4 to $7 billion surplus in FY 2020-21, according to the Legislative Analyst’s Office (LAO) 2020 Fiscal Outlook.”

The governor said he will reorganize the Department of Business Oversight and rename it the Department of Financial Protection and Innovation.

Budget Highlights and Newsom’s New Agencies

Newsom announced he is creating a Department of Cannabis. “We’re bringing all of it under one roof. It will have $550 million of revenue next year. This year it has $454 million.”

Newsom said he will establish a new Department of Early Childhood Development, and will get all 4-year olds into universal pre school. He’s committed $31.9 million for preschool, and $53.8 million in Calworks childcare.”

He is creating a new Office of Healthcare Affordability.

He will authorize a new State Park, and noted the last state park authorized was in 1944.

Newsom’s administration turned DOGGR into CalGEM. “It went from a dog to a gem, and will have a $24.3 million enhancement.” DGOOR was the Division of Oil, Gas, and Geothermal Resources, is now the Geologic Energy Management Division (CalGEM), which oversees the drilling, operation, maintenance, and plugging and abandonment of oil, natural gas, and geothermal energy wells. Newsom said he’s “focusing on decommissioning.”

Prison Closure

“I want to Close a state prison,” Newsom said. “The tough on crime initiatives created the overcrowding problem,” he added. “The right thing to do is shut down private prison contracts. We have a strategy and a plan to shut down a prison.”

“We also want to transform prison life – completely reimagine,” Newsom said. He announced a new youth offenders program, which will create mentors – “we will lock youth in with lifers, mentors.”

Independent Contractors

Newsom doubled down on AB 5, the new law that reclassifies independent contractors and freelance workers as employes. Newsom said he budgeted nearly $20 million to enforce it. “So not only did Dems pass it, play favorites by giving carve-outs, NOW they’re chasing after Californians who r just trying to make a living where/what/how they want,” Sen. Shannon Grove said on Twitter. 

Higher Education

Newsom announced partnerships with California State University and prisons. “We’re going to extend visitations. Eventually I want to invite some childcare.”

“Probation should be 2 years maximum for felonies,” Newsom said. “The data and evidence bears this out. And more money to front load on adult probation. And we are going to hire a new reentry coordinator at HHS.”

#CABudget 2/5: Too much of this is out of touch w/ Californians. Nearly $20M will go to cracking down on #AB5 & limiting worker freedom, despite pleas to #FixAB5.

????Poor prioritization. We could house Californians instead of preventing them from earning $ the way they choose. pic.twitter.com/mfUTnP3Bly

— Senator Shannon Grove (@ShannonGroveCA) January 10, 2020

Public Employee Pensions and Debt

Newsom admitted that the pension issue “remains daunting in California…” He said it was $260 billion.

“We have a CalSTRS challenge and CalPERS challenge,” Newsom said. “We are waiting for new numbers. We’ve got to get serious about those long term obligations, and we are.”

Projecting a $5.6 billion surplus, Newsom announced the Rainy day fund is $18 billion.

Schools

Newsom said this is the highest level of investment in schools at  $84 billion, which is a 3.03% growth. 

He said we still haven’t moved achievement testing numbers. “It’s stubborn and slow. Stubbornly we are making progress.”

Newsom addressed the teacher shortages, and noted California needs more prepared teachers. “75% of the school districts have teacher shortages,” Newsom said.

There are 23 low-performing districts over represented by African America students. Newsom said there is “deep systemic underrepresentation. It is important to have a diverse teaching force… a teacher who looks like you…”

He said $900.1 billion will be invested in teacher improvements; $175 million in teacher residency program; a focus on special ed and poor performing schools. 

“In high poverty schools, there are three times the unprepared teachers.”

“I’m passionate about special ed because I was one of them growing up,” Newsom said. “I had remarkable people that intervened and am standing at the podium today because of it.””

“It’s a crisis – we’re going to do better.” Newsom said California spent $645 million last year; this year $895 million to focus on training and focus, and social emotional learning. 

“”I’m a supporter of the LCFF,” Newsom said (schools Local Control Funding Formula). But I recognize what the audit recognized… more accountability and transparency. We have more work to do this year.”

Newsom said $300 million will go to lowest performing districts, as well as opportunity grants, to close the gaps in learning.

“I believe in community schools and public partnerships. We’re creating wellness centers, bringing health centers into the schools – $300 million for the integration of physical and mental health.”

Newsom said his wife was at the budget briefing because of her mission of quality student meals. “Betsy DeVos and the Trump administration are rolling back the good work of the Obama administration. We’re going to do it,” he said, announcing they are increasing the budget for school meals. 

Newsom said he appointed his own surgeon general, specifically to address and invest $157.5 million into CalWorks last year.

“But in order to get where we want to go, we need to establish department of early childhood development. 

Hire Education

Newsom is committing $786.8 million: $200 million to California State University system; $217.7 at University of California; $370 million for community colleges.

He’s offering legal services and free text books, $83.2 million for apprenticeships.

Cal grants were $97 million last year. Newsom is adding an additional $21.6 million this year, and said he will increase opportunities in underserved communities.

Housing 

Newsom said last year he committed $1.75 billion in housing production. “But not one dollar went out in the year. The money now will start flowing. I’m excited. Local dollars go out this month – $125 million now, another in February.”

Proposition 63

Newsom announced he wants to reform Proposition 63, the California Mental Health Services Act. Newsom said he’s been working with former Sen. President Pro Tem Darrell Steinberg, the author of Prop. 63. “I just want to clarify it, focus it. We still have a lot of people sitting on reserves of $539 million. We need it spent, or it will revert back to state.”

Newsom said he has a new working group focusing on it. He also announced he will take a look at the Lanterman Act. The Lanterman Developmental Disabilities Services Act says people with developmental disabilities and their families have a right to get the services and supports they need to live like people without disabilities. “I’m a civil libertarian, but that act was conceived when I was conceived,” Newsom said. “We need to meet the conditions that exist today. If you ask me specifically, I’m going to hem and hah, and misdirect you.”

He said it was necessary to bring it up today, because it ties into CalAIM.

Health Care – Covered California

Newsom said this year we’ve got to get serious about reducing health care costs. “Transparency – more data, more options for coverage.”

He is creating a new office of healthcare affordability.

“We have a public option – Covered California, and Medi-Cal. We want to strengthen our public option. I’m very excited about this. Signaling in this document – going after surprise billing.”

Newsom is expanding health coverage regardless of immigration status, for those 65 and older.” We believe in universal health care. It is the financially responsible thing. Some don’t believe in letting people die on the sidewalks. I would prefer to invest in keeping people out of emergency rooms.”

“We believe as a state we can do more. We are investing in California RX. We already in active conversations with major purchasers in this state. Insulin is top of list.”

Newsom said he is also working on Best Price Medi-Cal, the  Golden State drug pricing schedule. “It’s very exciting and very controversial.” He said he will be getting everyone in the state to pool their RX purchases.

He is proposing a vaping tax of $2.00 tax for each 40 grams. Newsom said it will generate tens of millions of dollars. “We’re going to do more than federal government on flavors.”

Consumer Financial Protection

“The federal government is getting out of the business – we’re getting into it,” Newsom said of his new New consumer financial protection law. “To go after payday lenders and the like. We’re going to protect consumers from unfair and predatory practices. Trump’s pulling away, we’re going to protect.”

Climate Change – California Green New Deal

Newsom said he will leverage the state’s $700 Billion Pension Investments, Transportation Systems and Purchasing Power to Strengthen Climate Resiliency against climate change. “Californias Green New Deal is on the way,” the governor said. He’s budgeting $12.5 for five years for “climate resiliency,” and plans to get this on the ballot.

Newsom said he is committing an initial $965 billion of cap and trade funds, to grow over four years for a new program called the Climate Catalyst Fund. “This is the way of helping fund California’s Green New Deal, to focus on sustainable food process, smart agriculture, and methane capture process.”.

Assemblyman Vince Fong (R-Bakersfield) responded to Newsom’s budget: “This budget is more spending with little accountability. We must do a better job of investing every dollar that comes from every Californian to ensure the effective use of taxpayer dollars and live within our means. This record budget continues to shortchange fundamental water infrastructure, reliable energy production, traffic congestion relief, and relief for hardworking middle-class families facing a severe affordability crisis. We must get back to the basics and provide commonsense solutions for the problems Californians are rightfully upset about every day. We can no longer ignore the worsening quality of life issues whether it’s homelessness, housing costs, or rising crime in our neighborhoods. California needs a new direction.”