July 4, 2020
Governor’s budget with an activist agenda, something for everybody
SACRAMENTO – (INT) – Governor Newsom says his proposed budget for the coming year makes responsible investments in the state’s economic future while tackling head-on persistent challenges facing the state.

While California’s economic growth has fueled the nation’s economy, Newsom says “there are deep, structural challenges that threaten our state’s future and demand our urgent attention. These problems – our widespread affordability crisis, expanding homelessness crisis and catastrophic wildfires – have been decades in the making and won’t be fixed overnight.”

Budget Highlights:

RESERVES: The Rainy Day Fund assumes an additional transfer of nearly $2 billion in 2020-21 and an additional $1.4 billion over the remainder of the three-year forecast period. The Rainy Day Fund balance is projected to be $18 billion in 2020-21.

AFFORDABILITY CRISIS: California may become the first state to create its own generic drug label and making the state’s generic prescription drugs available for sale to all Californians. Expands full-scope Medi-Cal coverage to low-income undocumented Californians aged 65 and above. Budget authorizes $500 million annually for the state's housing tax credit program and continues to support housing development on excess state lands. In addition, the Administration is streamlining state processes to accelerate housing production.

HOMELESSNESS: The Budget proposes more than $1 billion to shift the state's involvement to house unsheltered individuals living in California, by launching the California Access to Housing and Services Fund with a $750 million initial investment. This Fund will create a structure for developing affordable housing units, supplementing and augmenting rental subsidies, and stabilizing board and care homes.

EMERGENCY RESPONSE: Added funding for new firefighters during peak fire season, increasing the number of year-round engines, and providing further relief coverage to support state firefighter health and wellness.

PROMOTE OPPORTUNITY: Expand access to child care, preschool and full-day kindergarten with funding for 10,000 additional full-day or full-year preschool slots, moving the state closer to its goal of universal preschool for all income-eligible four-year-olds.

K-12 EDUCATION PER PUPIL: The Budget proposes an investment of approximately $900 million in teacher training, including professional development, educator service awards, and teacher residency programs. Includes $300 million one-time for grants and technical assistance to prepare and implement improvement plans at the state’s lowest-performing schools.

ACCESS TO HIGHER EDUCATION: The Budget proposes major investments in Inland California communities that face higher unemployment and create fewer jobs in high-wage sectors. The Budget allocates additional ongoing funding to expand enrollment and increase operational support for the UC Riverside School of Medicine.

CLIMATE BUDGET: Includes $12 billion over the next five years. Three key areas of the climate budget are a proposed climate resilience bond, cap-and-trade expenditures to continue the transition to a carbon-neutral economy, and a new Climate Catalyst Fund to promote the deployment of new technologies.

CRIMINAL JUSTICE: Continue expansion of opportunities for rehabilitation and treatment – starting with the youngest offenders in state prison. The Budget proposes to cluster the 5,800 young offenders (under age 26) into campus-style environments within existing facilities.

JOBS, THE ECONOMY: Funding to establish a new Department of Better Jobs and Higher Wages to consolidate the workforce functions currently dispersed across the Labor and Workforce Development Agency. It also funds the next $1 dollar increase in the state’s minimum wage, bringing it to $13 per hour for most employees as of January 1, 2020. The Budget also proposes to reduce the minimum franchise tax for new small businesses.
Story Date: January 16, 2020
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