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California Governor Newsom’s 2022 budget: COVID and climate

Building on projections for a ninth consecutive year of excess tax revenue – a streak that has made California’s deficit a distant memory – the $ 286.4 billion spending plan unveiled by Gov. Gavin Newsom on Monday ‘builds on the state’s recent efforts to tackle the COVID-19 pandemic, homelessness and worsening drought while breaking K-12 school funding records set last year.

In total, the governor’s plan calls for nearly $ 10 billion in new spending for what a fact sheet from his office calls “five of California’s biggest challenges: COVID-19, climate change, homelessness, inequalities and the safety of our streets ”.

In general terms, Newsom’s proposal to the Legislature is in line with budgets drafted in recent years. Although he directs excess tax revenues to state cash reserves and pays off some long-term debt, much remains to be done to prioritize the agendas championed by the Democratic governor and his party legislative leaders. .

“We have the ability to invest in our growth engines, to invest in the future, as well as to prepare for the uncertainties that the future presents,” Newsom said at a press conference on Monday.

Most of the plan covers expenses for the fiscal year that begins July 1. But the governor is also asking lawmakers for immediate action to expand the state’s response to the COVID-19 pandemic, asking for permission to quickly spend about half of a $ 2.7 billion budget proposal. to boost testing, vaccinations, and health workers across the state. Newsom also wants to reinstate rules requiring California employers to provide COVID-19 sick leave to workers to recover or care for a family member, a statewide policy that expired in the fall last.

A continued effort on the pandemic is one of many carry-overs from last year in Newsom’s budget, his fourth since taking office in 2019. The spending plan also contemplates significant new funding in response to the crisis. homeless people in the state, calling for an additional $ 2 billion over two years to move people out of settlements and place them in immediate shelter and to provide mental health services. These efforts are seen by the governor’s administration as an intermediate step pending the completion of long-term housing options, funded by the historic $ 12 billion investment from last year’s state budget in helping the homeless.

Republican lawmakers are urging Newsom to speed up efforts to resolve the issue, asking the governor on Friday to convene a special legislative session on the matter. Among the priorities listed in their letter to the governor, GOP lawmakers say the state needs to increase accountability for how and where funds have already been spent.

An additional $ 2 billion would be used to meet California’s broader housing needs, providing housing subsidies and tax credits to trigger the development of more places to live in downtowns across the country. State. Newsom’s budget presents this effort as a way to promote “a comprehensive and integrated framework for climate and housing planning”.

Efforts to mitigate the impacts of climate change would also be stepped up as part of the governor’s plan: $ 1.2 billion in new funds to reduce the risk of forest fires through better forest management, $ 648 million in new funds $ for firefighting and $ 750 million for drought relief for residents, agriculture and wildlife habitat.

Various proposals in the new spending plan aim to help low-income families, with a focus on children. Newsom’s proposal would index the state’s $ 1,000 “young child tax credit” to inflation, which would allow the annual grant to increase over time, beginning in the year. tax year 2022. The budget also seeks to overturn a long-standing law that cuts child support payments to a parent who is a former recipient of government assistance, such as the Workplace Assistance Program. the State, CalWORKs. This would reduce the government’s clawback revenue by $ 187 million.

Fees paid for Medi-Cal coverage by pregnant Californians, children and working adults with disabilities would be reduced, and the budget targets a significant new investment – $ 400 million – in higher payments to physicians who accept patients from the program. Part of the funds would be allocated to improving preventive maternity and child care.

Few changes to the government-funded healthcare program are likely to receive as much attention as Newsom’s endorsement of what many Legislative Democrats have wanted for several years: Medi-Cal eligibility for any resident, regardless of their immigration status, which qualifies based on their income. The current law provides Medi-Cal coverage to immigrants up to age 26 and, as of May 1, to those 50 and over.

Child care services would expand under the plan, including additional subsidized child care slots and increased tariffs for child care providers – in part, due to the dealer’s agreement. last summer to recognize a new union representing caregivers.

As with most state budgets, constitutional requirements passed by voters give K-12 schools and community colleges the largest portion of general fund dollars. Newsom’s plan provides $ 119 billion in funding for education, almost the equivalent of all state budget spending in 2011-2012. All sources of funding combined, spending per student in California is estimated to reach $ 20,855, with more dollars coming from the general state fund than ever before.

The budget sent to lawmakers on Monday provides more than $ 600 million in new funding for the University of California and California State University campuses, combined, on top of the funds’ current general support. Both systems are expected to increase the number of students in the state, and the budget adds more money for scholarships for students from middle-class families.

Not all of the governor’s budget plan proposals are a continuation of earlier efforts. Following a recent increase in retail theft in California, Newsom has launched a new plan to strengthen law enforcement efforts. This includes funding for what his administration calls a “smash and grab execution unit,” grants for small businesses that have been affected, and state-level prosecutions if local prosecutors choose not to act.

While the governor’s budget is chock-full of ambitious new proposals, the enormity of the projected fiscal surplus may again overshadow any singular effort. A surge in tax revenue – widely estimated by Newsom to total $ 45.7 billion – replaced what state officials saw last January as a structural imbalance in the upcoming budget.

And while lawmakers will focus their efforts on where to spend taxpayers’ money, they will also be forced to adjust to the impact of a constitutional limit on government spending, passed by voters more than four decades ago. . This law uses a formula based on economic and demographic factors to calculate the level of spending allowed – with revenues above the limit, over a two-year period, allocated either to certain long-term projects or distributed among schools and taxpayer discounts.

Times editors Hannah Wiley and Mackenzie Mays contributed to this report.




Los Angeles Times

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