California Governor Gavin Newsom recently submitted his 2021-22 State Budget proposal to the Legislature – a $227.2 billion fiscal blueprint that provides funding for immediate COVID-19 response and relief efforts where Californians need it most while making investments for an equitable, inclusive and broad-based economic recovery.
With the end of the COVID-19 pandemic in sight, the Governor’s Budget prioritizes key actions that will help the California families and businesses impacted most.
It proposes $372 million to speed up administration of vaccines across all of California’s 58 counties, bolstering the state’s all-hands-on-deck approach to swift and safe vaccine distribution.
It also includes a $14 billion investment in economic recovery and the Californians who most need relief – those who have lost their jobs or small businesses, or are facing eviction – advancing direct cash supports of $600 to millions of Californians through the Golden State Stimulus, extending new protections and funding to help keep people in their homes and investing in relief grants for small businesses.
As part of this investment in California’s future, the Budget intensifies the Governor’s commitment to equity in and for our school communities, reflected by the highest levels of school funding – approximately $90 billion total – in California’s history. The commitment includes investments to target the inequitable impacts of the pandemic on schools and families, including $2 billion to support and accelerate safe returns to in-person instruction, $4.6 billion to help students bounce back from the impacts of the pandemic and $400 million for school-based mental health services.
In addition to these measures to support Californians through the end of the COVID-19 pandemic, the Budget also advances long-term strategies for an equitable, broad-based economic recovery so the state can emerge from the pandemic stronger than before. Building on actions the state has taken to support California’s businesses throughout the pandemic, including emergency aid and regulatory relief, the 2021-22 State Budget makes investments across sectors and proposes supports for businesses of all sizes, including $777.5 million for a California Jobs Initiative, which focuses on job creation and retention, regional development, small businesses and climate innovation.
The Budget recognizes how COVID-19 has disproportionately impacted Californians who were already struggling before the pandemic, exacerbating decades-long inequalities. Accordingly, it works to expand opportunity for some of the hardest hit Californians and help them get ahead. The Budget also proposes one-time and ongoing investments totaling $353 million to support California’s workers as they adapt to changes in the economy brought about by COVID-19. It lifts up proven, demand-driven workforce strategies like apprenticeship and High-Road Training Partnerships and advances collaboration between higher education and local workforce partners.
“In these darkest moments of the COVID-19 pandemic, this Budget will help Californians with urgent action to address our immediate challenges and build towards our recovery,” said Governor Newsom. “As always, our Budget is built on our core California values of inclusion, economic growth and a brighter future for all. The Budget makes progress towards the goal I set when taking office to harness California’s spirit of innovation and resilience and put the California Dream within reach of more Californians. I look forward to working with the Legislature to enact these critical immediate and longer-term priorities for our state for the 40 million who call the Golden State home.”
This Budget is built on the prudent fiscal management that has helped the state weather the COVID-19 Recession in 2020, and with an improved revenue forecast entering 2021. Through the end of this pandemic and beyond, it advances the Governor’s sustained focus on increasing opportunity through education, including early education; increasing the affordability of health care and housing, and effective governance.
The Budget makes new proposals to address the affordability of health care and housing, and supports the increase in the state’s minimum wage to $14 per hour. The Budget includes significant new strategies to reduce the impacts of climate change, with focused investments to support the state’s zero-emission vehicle goals and an additional $1 billion to address a comprehensive wildfire and forest resilience strategy.
Finally, the Budget promotes effective government with additional investments to improve the state’s ability to respond rapidly to emergencies and continues the critical work to improve government efficiency and bring government services into the digital age.
The Budget reflects $34 billion in budget resiliency – budgetary reserves and discretionary surplus – including: $15.6 billion in the Proposition 2 Budget Stabilization Account (Rainy Day Fund) for fiscal emergencies; $3 billion in the Public School System Stabilization Account; an estimated $2.9 billion in the state’s operating reserve; and $450 million in the Safety Net Reserve. The state is operating with a $15 billion surplus.
The Budget continues progress in paying down the state’s retirement liabilities and reflects $3 billion in additional payments required by Proposition 2 in 2021-22 and nearly $6.5 billion over the next three years. In addition, the improved revenue picture allows the state to delay $2 billion in scheduled program suspensions for one year.
For further information on these and other items in the Governor’s Budget, the full Governor’s Budget Summary is available at www.ebudget.ca.gov.
