SACRAMENTO — California Governor Gavin Newsom on Friday released a $300.6 billion spending plan that would fund tax refunds, abortion care, bonuses for healthcare workers and more, fueled by a $97.5 billion surplus.
The ample budget largely reflects a continued increase in tax revenue driven by income gains from high-income households.
The “simply unprecedented” surplus is the latest windfall from state coffers, which have swelled by tens of billions of dollars in a short two-year period.
“No other state in American history has ever had such a large surplus,” Newsom said.
In January 2020, before the coronavirus pandemic, Newsom’s budget called for $222 billion in total spending, meaning the state budget grew by about 35% over two years.
He wants to pump new dollars into homelessness, tax refunds and abortion care. The governor’s budget also includes $128.3 billion for all K-12 education programs, the most on record for California schools.
Newsom also released the first budget estimate for his CARE Court plan, which would set up mental health courts in California’s 58 counties that would allow judges to provide treatment plans for people with serious, untreated mental illnesses.
The governor’s revised budget includes $65 million to set up the courts in 2022 and 2023, as well as $49 million in ongoing funding for the program.
However, Newsom’s administration also anticipates economic headwinds in the coming year. The governor noted signs of economic turmoil, such as inflation and war in Ukraine. These trends could lead to a leaner budget next year.
His proposal calls for $37.1 billion in reserves, including $23.3 billion in the state’s rainy day fund, $9.5 billion in a school stabilization fund, $3.4 billion in dollars in an operating reserve and $900 million in a social services safety net.
With a potentially smaller budget on the horizon, Newsom also pointed out that he plans to invest most of California’s surplus in one-time spending, instead of ongoing spending that the state may not be able to afford. able to cope if it does not maintain the same cash flow.
“It’s important, and I hope people understand why we’re doing it,” Newsom said. “I look forward to working with the Legislative Assembly and their respective staffs to discuss the imperative of caution, particularly at this time. And what more caution do we need in terms of evidence than the past two weeks , with the markets, volatility and bear markets in which at least two of the three main indices are currently located.
Even so, Republican leaders were unconvinced that Newsom’s budget represented the best plan for California.
“With a $300 billion budget, the fiscal cliff is approaching and Democrats are oblivious and arrogant,” the California Republican Party said in a statement. “Thanks to sweeping regressive policies, Californians are now paying more for almost everything they buy, while rising homelessness, failing schools, raging wildfires and devastating drought continue to worsen.”
“Democrats have surged to a staggering $97.5 billion surplus, and today’s revised May budget reveals that Gavin Newsom continues to believe in more spending instead of real solutions,” he said. continued the GOP. “Newsom and the Democrats personify the definition of insanity – they keep making the same mistakes and expecting different results. We are confident that November voters will not follow.
Newsom’s initial budget prioritized homelessness relief, COVID-19 response and transportation, as well as funding for climate change, wildfires and drought.
The revised plan adds money to provide tax refunds to all California vehicle owners. Newsom plans to spend $11.5 billion to give drivers $400 per vehicle – capped at $800 – to help cope with high gas prices and inflation.
Last year, by contrast, the state sent $600 stimulus checks to most taxpayers, whether or not they owned cars.
Legislative leaders did not support this approach, saying it will not help needy Californians who do not own vehicles.
“Senate Democrats don’t believe that a car ownership discount will do the trick,” Senate Speaker Pro Tem Toni Atkins, D-San Diego, said in a statement Thursday. “This plan excludes non-car owners, including low-income and elderly Californians, who are also impacted by today’s high consumer goods costs and also deserve relief.”
He also offered $933 million to give bonuses to about 600,000 nurses and healthcare workers to help retain employees in an industry plagued by burnout.
Additionally, Newsom wants to spend $57 million to increase access to reproductive health care in California, including $40 million to help low- and middle-income residents without insurance get abortion care.
Newsom has been a strong advocate for abortion rights. He has championed abortion access even more fiercely since Politico released a draft U.S. Supreme Court opinion that showed justices were set to overturn Roe v. Wade, the 1973 decision that guaranteed federal abortion rights.
After the draft notice leaked, Newsom joined legislative leaders in calling for an abortion rights amendment to the California constitution.
As states move to regulate access to abortion, Newsom also expressed her desire for the Golden State to welcome pregnant women seeking abortions in states that ban the procedure.
During his presentation on the budget review, Newsom drew a sharp distinction between what he sees as California’s “pro-life” approach and that of other more conservative states that restrict abortion but do not are not investing in broader social needs.
“I think there are a lot of people who are pro-conception at birth. But they are far from pro-life,” Newsom said. “Because if you’re pro-life, you’d support prenatal care, you’d support black infant health, you’d support child care and kindergarten. If you’re pro-life, you’ll believe in science, you’ll believe in climate change. If you are pro-life, you would support home visits. If you were pro-life, you would actually support common sense gun safety. If you were pro-life, you would actually expand after-school and pre-school programs.