Gov. Gavin Newsom proposed the largest budget in California history today. Here's what you need to know




  • In Business
  • 2020-01-11 00:12:54Z
  • By USA TODAY
 

California Gov. Gavin Newsom unveiled his second spending plan on Friday - the largest in the state's history - offering a detailed look at his top priorities for the coming year. Plans for the $222.2 billion budget include big investments in wildfire preparation and mitigation, housing and homelessness, and the largest investment in K-12 education in history.

Starting with a projected $5.6 billion surplus, the new budget proposal is 2.3% larger than last year's $214.8 billion budget, signed in June, and adds a historic estimated $18 billion to California's so-called "rainy day" fund.

Speaking from Sacramento and live on Twitter for over two hours, Newsom outlined his hopes and goals for the coming years. Saying the budget proposal would help set the "tone and tenor" of the new year, he added his intention to show constituents what matters most to him, "so there's no ambiguity."

Newsom also acknowledged that California faces significant challenges, including projections that economic growth will slow in the coming years, but still outlined ambitious initiatives to both tackle issues and advance new progressive policies in the state.

"The budget is not a what, it is not a why - it is a how document," he said.

Lawmakers have until June 15 to pass the budget, which will be implemented in July at the start of the fiscal year.

Here's a look at top-ticket items Newsom hopes to tackle this year:

Housing and homelessness

California's housing and homelessness crisis continues despite a series of ambitious efforts rolled out last year. Housing costs continue to rise and roughly 150,000 Californians are living on the streets or in shelters.

Building on $1.15 billion previously allocated for local governments, this proposal plans for an additional $1 billion, including a new California Access to Housing and Services Fund, a $750 million investment in new affordable housing units and subsidies for rentals.

On top of last year's $1.75 billion investment to increase housing supply, Newsom said an additional $500 million will be available annually from California's housing tax credit program.

Two days before the budget briefing, Newsom issued an executive order to expand the use of state-owned land "on a short-term emergency basis" for housing and the homeless. Empty health-care facilities, Caltrans property alongside highways and roads, and unused fairgrounds could all be made available.

"Homelessness is a national crisis, one that's spreading across the West Coast and cities across the country," Newsom said in a statement with the announcement on Wednesday. "The state of California is treating it as a real emergency - because it is one."

The governor also wants to transform the Medi-Cal system and utilize the Medi-Cal Healthier California for All initiative to address mental illness, and develop a task force to improve and strengthen the behavioral health system.

K-12 education

Newsom's budget also continues to ramp up funding for schools that he says are struggling to keep up. The budget includes historic levels of investments, continuing the growth in funding for schools that has increased roughly $7,200 per student over the past decade.

Newsom's proposal includes $900 million for training teachers and creating new programs that "improve the teacher workforce," which he says is "foundational to improving student outcomes."

Also included are $300 million one-time grants for low-performing schools and a 40% boost in school nutrition program funding.

Wildfires and natural disasters

As the state faces wildfires that are increasing in number and intensity, Newsom is hoping to add 555 full-time firefighters over five years, a 12% increase over the 4,800 currently employed.

Building on last year's $1 billion for emergency response, this year the budget proposal also includes $100 million to bolster homes in fire-prone areas, plans to increase the use of Light Detection and Ranging data, and fund the creation of a new Wildfire Forecast and Threat Intelligence Integration Center.

Newsom said the state is also working on improving its early-alert system for earthquakes and investing in flood protection, to be funded by the $2 billion budget for emergency services.

Health benefits

California soon could be the first to create a state-owned generic drug label. Called "CalRx," Newsom announced his administration is working to make prescription drugs available and affordable to all Californians. While scant on details, he announced that the state is already in active negotiations with major purchasers and that there will be a "detailed spring proposal" on the plan that will require legislative support.

The budget also includes plans to provide Medi-Cal coverage to California residents over the age of 65, including undocumented immigrants.

"There is no question that Governor Newsom is California's health and human services governor," California Health and Human Services Agency Secretary Dr. Mark Ghaly said in a statement. "The governor's budget makes bold investments to advance key health and human services priorities including quality, affordable health care regardless of your age or income; transformed health care services through the Medi-Cal program; lower prescription drug costs; integrated behavioral health care services; and support for those who struggle with homelessness."

Climate change

Over the next five years, the Newsom proposes a $12 billion climate budget including a newly proposed "Climate Catalyst Fund" that will invest in small businesses and emerging markets for new technologies that help California achieve its ambitious climate goals.

Administered by the Infrastructure and Economic Development Bank, the budget proposes capitalizing the fund with $1 billion over the next four years to finance projects like new low-carbon transportation options, and sustainable agriculture.

Other key areas of interest

  • Newsom shared that he's set the goal of closing a state prison between 2022 and 2024, and the state will work to reduce the prison population in order to meet that goal. Meanwhile, he's planning for new prison policies modeled on Norwegian prisons, which are less punitive and more rehabilitative. The proposal includes an initiative that would group 5,800 offenders under the age of 26 in "campus-style environments" where they will have expanded access to programs, educational opportunities, and mentorship, new investments into academic programs for all prisoners, and partnerships through the California State University system.

  • California could become the first state to have its own version of the federal Consumer Financial Protection Bureau. The budget includes a plan to compensate for the Trump Administration's rollback of federal protections with a new California Consumer Financial Protection Law.

  • Along with establishing a new Department of Better Jobs and Higher Wages, the budget includes the latest statewide boost in the minimum wage to $13 per hour, which started this month.

  • California's Paid Family Leave was expanded from six to eight weeks in the last budget, and this year Newsom hopes to expand job protections so more Californians can access that benefit.

  • A $53 billion allocation will address statewide infrastructure projects, doled out over the next five years. The investments are likely to go toward sustainable projects that help California achieve its climate goals.

This article originally appeared on USA TODAY: Gov. Gavin Newsom proposes largest budget in California history

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