SACRAMENTO, Calif. — Riding a second consecutive year with a projected budget surplus running in the tens of billions of dollars, California Gov. Gavin Newsom unveiled a state spending plan on Monday that would pour money into big-ticket programs ranging from fighting COVID-19 to getting more people to drive electric cars.
He'd also allocate money to expand access to health care for undocumented immigrants, help homeless people find shelter and provide more day care options for parents.
Not included in his $286.4 billion spending proposal were plans to send rebate checks back to taxpayers. At least not yet.
Despite not having specific plans to send out checks in his proposal, he noted that the state may be on track to require rebates, something officials must do when the state brings in so much money it exceeds a spending limit outlined in state law.
"There likely will be substantial contributions back to the taxpayers," Newsom said. "What form will work and to what degree will be determined."
Newsom's rosy budget projections, which anticipate a $45.7 billion surplus and a $213.1 billion general fund, come even as the COVID-19 omicron variant fills hospitals and strains the economy.
Newsom and his Finance Director Keely Bosler acknowledged that the projections used to draw up the spending plan for the 2022-23 budget were finalized in early December before omicron swept through the state. The trajectory of the coronavirus and of the broader U.S. economy could force substantial changes to Newsom's plan by May, when he's required to update his spending plan.
In the meantime, Newsom's proposal kicks off negotiations with lawmakers, who must pass budget legislation by June 15 in time for the July 1 start of the next fiscal year.
The budget Newsom detailed would be California's largest ever, and would add money for infrastructure and increasing the health care workforce, as well as $34.6 billion for reserve accounts and paying down billions in pension debt. It would send $119 billion to K-12 schools.
California finds itself swimming in money for the second year in a row because the state's high earners continue to prosper despite the economic fallout from the coronavirus pandemic.
Last year's $262 billion budget benefited from an estimated $80 billion in surplus money. Newsom and lawmakers used the money in the budget they adopted last summer in part to deliver money directly to Californians affected by the COVID-19 pandemic, such as the $600 stimulus checks that went to millions of residents.
Newsom focused much of his budget presentation on funding to combat five "existential threats" to California: COVID, climate change, homelessness, high cost of living, and public safety issues.
He said he's proposing some $22 billion in spending on climate change, including increased funding for fighting fires and drought, as well as to boost rural industries.
Among the flashiest proposals Newsom unveiled Monday: an expansion of the state's health coverage for low-income Californians to include undocumented immigrants of all ages. Currently, undocumented people ages 26-49 are not eligible for the program. Under Newsom's plan, the expansion wouldn't take effect for two years.
Newsom is also proposing to add $2 billion in homeless aid, on top of the $12 billion he and lawmakers passed last year.
Most of that new money would go to quickly trying to get people off the streets and get them help, Newsom said. About $500 million would go toward cleaning up homeless encampments.
"The bottom line is encampments on the streets and sidewalks are unacceptable," Newsom said. "It's inhumane. People are dying."
Newsom also wants to get more homeless people into treatment for mental health, but declined to give details.
Democrats in the Legislature applauded Newsom's plans.
"As the pandemic continues to ravage families, schools and small businesses, we will pay particular attention to supporting those still struggling as well as increased investments in affordable and homeless housing, our essential workforce, health and mental health services, education infrastructure and actions that strength California's leadership on climate protection," said state Sen. Nancy Skinner, a Berkeley Democrat who leads the Senate Budget Committee.
Newsom's budget plan includes new spending on recruiting, training and hiring more health care workers, including doctors, nurses, social workers and a new kind of worker the administration calls community health workers.
That funding would come on top of the $2.7 billion in COVID-19 response funding Newsom called for lawmakers to approve Saturday, and would be focused on longer-term health workforce development.
Ahead of his big announcement Monday, Newsom had previewed that his budget would include spending some of the anticipated surplus on infrastructure, something lawmakers on both sides of the aisle say they support. On Monday, he announced he wants to spend $9.1 billion on transportation, including billions for high-speed rail.
He also said he wants to give Californians a modest "gas tax holiday" by suspending a scheduled gas tax increase that would otherwise take effect in July.
Newsom also proposed new money for police to to crack down on organized retail crime. His budget would also add money for childhood literacy programs, including children who, like him, struggle to read because of dyslexia.
Assembly Republican Leader Marie Waldron took aim at his high-speed rail plans in a statement reacting to the budget.
"While some of this money is going to the right places, all the funding in the world won't make a difference if we don't change the way it's spent," Waldron said. "Returning humans to the moon will be quicker and cheaper than California's attempt to build a railroad from San Francisco to LA. If the governor really wants to turn things around in California, he needs to make government more responsive, efficient and competent — not just bigger."
