Governor Gavin Newsom released the entirety of his state budget proposal for the 2021-22 fiscal year on May 14, after a week of him revealing pieces of his $100 billion California Comeback Plan.
The governor’s plan is supported by an estimated $75.7 billion in budget surplus this year and about $27 billion in federal support. The surplus stands in stark contrast to a $54.3 billion shortfall that was estimated last year.
Newsom said in his budget presentation Friday that the budget reflects an attempt to address recession-induced impacts from the pandemic as well as historical inequalities.
“Our budget, understandably, represents and reflects the realities of this recession and the realities of this pandemic-induced reality,” Newsom said. “Particularly as it’s related to the issues that have impacted low-wage workers, small businesses as well as decades-long inequalities, those pre-existing conditions around race, ethnicity, the pre-existing conditions around wealth disparities and income disparities, obviously have come to the fore and must be addressed.”
There is, however, contention about how much money the state actually has to spend. On Monday, the state legislature’s budget analyst estimated that the state has a $38 billion budget surplus to allocate. The difference between the estimates, according to a report from the Legislative Analyst’s Office, is that the governor’s estimate includes “constitutionally required spending on schools and community colleges, reserves and debt payments.” Funds required for those categories aren’t considered surplus by the office because they need to be allocated for specific purposes, according to the report.
The final state budget for the next fiscal year needs to be approved by the legislature in June.
Before the full reveal of his proposal last week, Newsom highlighted a proposed $20 billion investment into California schools, $12 billion to take on the state’s homelessness crisis, adding $1.5 billion to a fund for direct grants to California small businesses, $5.2 billion for the payment of all unpaid back rent that tenants have accumulated during the COVID-19 pandemic, giving $600 stimulus checks to state residents making less than $75,000, and much more.
On Friday, Newsom highlighted new areas of his proposed budget and expanded upon areas he’d discussed earlier in the week.
One major area Newsom talked about was the climate. Newsom’s proposed budget includes $2 billion in emergency preparedness investments for wildfires, which includes purchasing new equipment for firefighting and for land and forest management projects.
The proposed budget includes $3.2 billion to help accelerate the state’s goal of phasing out gasoline-powered cars and reducing the state’s reliance on fossil fuels by 2035. And the budget includes $1.3 billion in preparing the state for sea level rise, extreme heat and environmental justice, such as oil well capping, toxic site cleanup and pollution control.
The plan would also invest $5.1 billion in drought support, water supply and natural landscape projects around the state. Additionally, the plan would invest $300 million into environmental justice, and $385 million into sustainable agriculture, covering such areas as equipment replacement, soil management and sustainable groundwater management.
The proposal also focuses on infrastructure, with a $7 billion allocation for expanding broadband infrastructure and $11 billion for building “roads, bridges, high-speed rail, ports and public transportation,” according to a press release.
Additionally, the proposal includes $4.4 billion for emergency response to COVID-19, which includes funding for testing, contact tracing and vaccines. And the proposal includes investments into mental health — about $400 million for school-based mental health services, $202 million for residential mental health facilities and $304.5 million for people incompetent to stand trial, along with an anticipated $500 million from the federal government for addressing mental health and substance abuse.
For the healthcare system as a whole, the proposed budget includes a $94.8 million investment into expanding and maintaining telehealth services, which have been used extensively during the pandemic. And the plan includes a $25 million investment into the state’s Master Plan for Aging.