Gov. Gavin Newsom Unveils $267.8 Billion Revised Budget

Governor Gavin Newsom unveiled his revised $267.8 billion May budget proposal on Friday, primarily touting the addition of his $100 billion California Comeback Plan.

Newsom’s plan, which was already partially revealed earlier this week, would be funded by California’s $75 billion budget surplus and $26 billion coming from federal COVID-19 relief funds.

One of the largest blocks of funding under Newsom’s proposal is $12 billion for an expansion of the Golden State Stimulus program. Under the proposed plan, Californians making $75,000 a year or less will receive $600 from the state. Families with children will receive another $500, with undocumented families also receiving $500. Californians will also see another $5.2 billion of direct support through the doubling of rental assistance to complete 100% of back rent paid for those who fell behind payments, as well as $2 billion  toward water, gas, and electric utility bills for those needing assistance. $1.75 billion will also go to affordable housing endeavors.

Another proposed $12 billion will go towards the homeless in California with a return of the Project Roomkey and Project Homekey program, along with more rent support aimed at homeless families. Programs for the homeless and jobless to go back to school or start a small business will get a $3.6 billion spending boost through the plan through grant programs, as well as through $35 million going to universal basic income pilot programs.

Billions will go to state cleanup projects on highways and public spaces, providing jobs for the homeless as well as at-risk youth. Much of that funding will also focus on local clean up efforts, such as the $40 million Clean-up California initiative that will create public art while cleaning up local areas.

Schools will also see more funding under Gov. Newsom’s $100 billion proposal, with $14.5 billion going to educational efforts such as the creation of a universal preschool program by 2024, an effort to hire more teachers and employees to reduce class sizes, add more after school programs, and add a universal breakfast and lunch program. Another $2 billion will be set aside for schools to safely reopen in time for the return of in-person classes this fall.

Another $11 billion will be directed at transportation, including $3.1 billion to be spent on rail and transportation improvements, and another $4.2 billion going to the High-Speed Rail program.

Other parts of the Governor’s proposal include:

• $5.1 billion going to California’s mental health system, including new mental health screenings and programs for Californians under the age of 26.
• $7 billion to better broadband internet connections
• $1.5 billion in additional small business grants
• Several billions in business grants and tax credits, including a $30 million tax credit for filmmakers and $147 million for businesses that are currently hiring new employees. $360 million would also go to “CalCompetes” tax credits for businesses that relocate to California.
• Several billions on drought response and water infrastructure.
• $3.2 billion going to the phasing out of gas-powered vehicles, including subsidies for switching over to electric commercial trucks and busses.
• $2 billion on new helicopters to better fight wildfires and to improve emergency response times in the state.

The $100 billion California Comeback Plan

Governor Newsom gave a speech on his budget revision and $100 billion California Comeback Plan shortly before submitting it to the state Legislature for approval. Newsom noted that he created the plan for California to not only better recover from the pandemic, but to set the state up for success throughout the decade and beyond.

“This budget that we’re about to announce, this historic, unprecedented , generational, transformative budget, is 100% the direct responsibility of 40 million people strong that not only met the moment over the last year, but met many different moments [and many] different challenges,” Newsom said on Friday. “The remarkability, the capacity for renewal and recovery is demonstrative. And that is I think will set the state up for not just a comeback, but an extraordinary decade if not century ahead.”

“It’s not lost on me that the greatness of this state, looking back on the 50s and 60s, when we were truly the tentpole of the American economy, it wasn’t by accident that the state of California thrived as much as it did during those decades.”

Many Democrats praised Newsom for his plan on Friday.

“There is a lot to be excited about in Governor Newsom’s budget proposal,” said Assemblyman Marc Berman (D-Menlo Park) in a statement. “California’s financial situation is far better than we could have hoped following such a devastating year, which is a testament to the resilience of those who live and work in our great state. However, millions of Californians and small businesses are still suffering from the impacts of COVID-19.”

“I am grateful that Governor Newsom is suggesting the state make an ongoing investment of $30 million to establish a basic needs center and basic needs coordinator on every community college campus, recognizing that tens of thousands of students are struggling with homelessness and food insecurity every day.”

“I also want to thank the Governor for his proposed one-time investment of $10 million on another student-centered initiative to establish common course numbering for all comparable courses across the community college system. This change will save students both time and money, as well as make it easier to transfer and reduce barriers to earning a degree.”

“These are just a few of the highlights from a budget proposal that will spur the California Comeback for all 40 million Californians.”

The California Democratic Party also released a statement on the plan, noting, “It’s clear – California truly is roaring back. Today’s unveiling of the $267.8 billion proposed state budget by Governor Gavin Newsom signifies the historical changes that Democratic leaders are making in the Golden State. Throughout the last year, our legislative leaders have worked to move us out of one of the most unprecedented challenges in history. The California Democratic Party unequivocally stands with Governor Gavin Newsom, our legislative leaders and all Californians as we recover and restore the health of our Golden State.”

Opposition against the Governor’s proposal

However, Republicans and a few Democrats gave caution to the plan on Friday, with reactions ranging from saying that the proposal needed to better address the real needs of Californians such as more focus on helping the state’s unemployed to accusing the Governor of using the program to “buy” his way out of the recall election later this year.

“California is facing a massive budget surplus. I stand with my Senate Republican colleagues and urge the governor to proceed with caution and address the real needs of the people,” said Senator Rosilicie Ochoa Bogh (R-Yucaipa) on Friday. “We have the opportunity to tackle issues that have plagued our state for quite some time, like housing, affordability and forest management. We must also invest in modernizing our education system to best meet the needs of students and parents.”

“California’s unemployment rate is 38 percent higher than the national average. Let us help revitalize our economy and empower employers and individuals to get back to work.”

“We cannot spend our way out of long-ignored problems. Let us invest in long-term solutions efficiently and effectively.”

Senator Republican Leader Scott Wilk (R-Santa Clarita), gave a more blunt rebuttal to Newsom’s plan.

“The governor has been channeling Oprah all week – where every studio audience member gets a new car,” noted Senator Wilk. “Unfortunately in about 18 months – when the money runs out – the car will be repossessed. Gavin’s ‘Recall Revision’ is a real life version of ‘Let’s Make a Deal.” Behind door number three – the tax bill.”

Newsom’s revised budget, including his $100 billion proposal, is expected to pass both the Assembly and the Senate, at least partially, in the coming months.