From housing to health care: Here’s what’s in Gavin Newsom’s $222 billion California state budget
Gov. Gavin Newsom wants to use a strong economy to help lower-income Californians by boosting education funding, revamping the state’s health program for the poor and getting homeless people off the streets through his second state budget proposal.
During a nearly three-hour news conference on the $222 billion plan, he detailed strategies to address the state’s teacher shortage, expand early childhood programs and steer more money to Medi-Cal, the state’s health program for low-income people.
“Our state has provided the rocket fuel for the nation’s economic expansion,” Newsom wrote in his plan. “California is showing the nation and the world what big-hearted, effective governance looks like.”
If approved by lawmakers, the proposal would represent the biggest state budget in California history and reflects a remarkably long economic expansion, which began in June 2009. It’s a big jump from the 2007-08 budget at the cusp of the Great Recession, which totaled $145.5 billion.
Newsom’s plan relies on financial projections that predict a $5.6 billion surplus next fiscal year. That’s much smaller than the $21 billion surplus surplus predicted for the current budget, reflecting expectations that the economy will continue to grow, but at a slowing rate.
“While we’ve enjoyed 11 years of growth and expansion, that is not a permanent state,” Newsom told reporters. “We’re not seeing a contracting economy, we’re seeing a slowing down of our economic growth.”
To guard against a future recession, Newsom wants to continue adding to reserves. The current $215 billion state budget also added billions to those reserve funds.
Newsom acknowledged that despite optimistic projections, he’s still proposing a new tax on vaping. It would charge $2 for every 40 milligrams of nicotine. The proposal would generate tens of millions of dollars, aimed at combating the dramatic rise in vaping among teenagers, which Newsom says deeply concerns him as a parent.
His budget also proposes tax cuts for small businesses and extensions of sales tax breaks on diapers and tampons.
Here’s a look at what else is in the record-setting proposal:
Education
Newsom called for a “steady focus on the basics,” starting with spending more on teachers. Although California is successfully closing education gaps for some students, the state must do more to improve education for African American students and students with disabilities, Newsom said.
He’s proposing roughly $900 million to address the state’s teacher shortage and improve teacher training. That includes $350 million to train teachers in special education, science and math, mental health intervention, English language learners, and support for LGBT students and other marginalized groups.
Newsom said his wife, First Partner Jennifer Siebel Newsom, will work on an initiative to improve student nutrition through school meal programs.
For younger children, Newsom wants to create a Department of Early Childhood Development and continue expanding early education and childcare programs. The budget includes more money to expand preschool and aims to direct more money toward building or renovating more preschool classrooms.
Assemblyman Jay Obernolte, R-Big Bear Lake, vice chair of the Assembly Budget Committee, criticized Newsom’s focus on preschool and said he would prefer to see state solve “existing problem with our K-12 education system” first.
“We continue to be the last in the nation, the worst record in the nation for student-teacher ratio,” Obernolte said. “That’s something that I think needs to be fixed and I would really like to see more state resources devoted to solving that problem.”
Newsom also wants to boost funding for education in Fresno. He said the effort is a top priority of his higher education council, which relied on help from outside consultants to develop strategies to better prepare students for industries in the region.
Health Care
Newsom is also calling for a “once-in-a-generation” revamp of Medi-Cal to increase preventive health services, boost assistance for homeless people and improve mental health care.
HIs plan would also steer nearly $700 million in additional money to the program.
His budget would allow undocumented people over age 65 to enroll in Medi-Cal, provided they meet the program’s income requirements. That proposal builds on the current budget’s Medi-Cal expansion to undocumented young adults.
The budget proposal also contains ambitious plans to cut prescription drug costs, including creating a state-owned generic drug label and a single drug purchasing market in California.
Republicans are critical of Newsom’s prescription drug plans, arguing they would be a government overreach.
“History has not been kind to previous state efforts to compete with private industry, they have not been crowned with glory,” Obernolte said. “I remain cautiously skeptical about efforts to get the state into the manufacturing business.”
Housing and Homelessness
In total, Newsom says the budget includes $6.8 billion related to housing, mostly from ongoing spending already approved in previous years.
Currently, housing funding travels through a complicated network of different state agencies, departments and offices, which Newsom said he wants to streamline.
His proposal also directs $750 million from the state’s anticipated surplus to help homeless Californians. That money would be distributed to local providers. It could be used to pay rent, build housing and improve shelters, according to Newsom’s office.
The budget also includes:
$250 million per year for four years to provide loans for small businesses to buy green technology to combat climate change.
Funding to increase enforcement of AB 5, the controversial California labor law that makes it harder for businesses to classify workers as independent contractors.
Plans to develop a California version of the Consumer Financial Protection Bureau.
$20 million to open a a new state park, although Newsom refused to say where because he said it would drive up the price of the land.
A goal to close a state prison by 2024.
Intent to shorten probation terms for California felons, which Newsom acknowledges will be controversial.
Creation of a new Department of Cannabis Control to consolidate the state’s cannabis regulation and oversight.
$50 million for the state’s animal shelters to work toward making California a “no-kill state” in 5 years.
Newsom’s announcement kicks off months of negotiations between his office and the Legislature. He’ll release a revised proposal in May. He and lawmakers have until June 15 to pass a budget in time for the start of the upcoming fiscal year on July 1.
The Bee Capitol Bureau’s Andrew Sheeler contributed to this report.
This story was originally published January 10, 2020 at 3:51 PM.