California Gov. Gavin Newsom Signs $202 Billion Pandemic Budget

Wednesday, July 01, 2020

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(Sacramento Bee)

California Gov. Gavin Newsom signed a $202 billion budget June 29 with emergency pandemic funding, expanded unemployment aid and billions of dollars in cuts forced by the coronavirus-caused recession.

The budget that takes effect July 1 assumed a $54 billion deficit brought on by the COVID-19 pandemic and Newsom’s March stay-at-home order, which halted much of the state’s economy.

“In the face of a global pandemic that has also caused a recession across the world and here in California, our state has passed a budget that is balanced, responsible and protects public safety and health, education, and services to Californians facing the greatest hardships,” Newsom said in a written statement.

The 2020-21 budget gives Newsom power to withhold $2.5 billion from cities and counties if they do not follow his administration’s COVID-19 rules designed to slow spread of the virus, including his statewide mask mandate.

Newsom warned he will use that power if counties don’t obey his orders to roll back reopening when the state directs them. His administration is currently urging Imperial County, where a surge in coronavirus cases has overwhelmed hospitals, to reinstate strict stay-at-home rules. And on June 28 he told seven counties they must close bars to slow spread of the virus.

In light of rising positive test rates and growing numbers of COVID-19 patients in hospitals, Newsom said during a news conference Monday that California will “be stepping up its enforcement.”

The budget also includes a $716 million fund Newsom can use for emergency pandemic spending. That’s much less than the nearly $3 billion the Democratic governor initially proposed, but is nonetheless a concession from lawmakers who initially said they would not let Newsom continue spending on COVID-19 response without their input.

The budget authorizes up to seven extra weeks of federally-funded emergency benefits for unemployed workers.

Newsom and the Legislature avoided forcing schools to make cuts immediately by deferring billions of dollars in payments, nearly $6 billion of which could be restored if the federal government sends California more money.

But education advocates argue schools still need more resources so students can return to classrooms safely, including protective equipment such as masks and increased cleaning to reduce coronavirus transmission.

“We appreciate and recognize that this budget agreement averts immediate education cuts and thousands of educator layoffs, but without additional revenues, it also kicks difficult funding problems down the road,” California Teachers Association President E. Toby Boyd said in a written statement.

Public universities fare worse under the budget, which cuts hundreds of million of dollars from University of California and California State University budgets. Nearly $1 billion could be restored to universities if the federal government sends more money.

The budget cuts state worker pay by about 10% and cancels raises many state workers were scheduled to receive in July. It also gives Newsom authority to impose two furlough days per month if pay-cut deals can’t be reached with labor unions that haven’t yet negotiated with the state.

The budget avoids cuts Newsom had proposed to so-called optional benefits such as dental care as part of the state’s health care program for low-income people, called Medi-Cal, and avoids changes to eligibility requirements that would have kept some low-income seniors out of the program. It also avoids proposed cuts to programs designed to keep seniors out of nursing homes. But the budget schedules cuts to Medi-Cal for next year, which health care advocates have criticized.

“Without revenues, California will be forced to revisit the proposed cuts,” Anthony Wright, director of consumer advocacy group Health Access, said in a written statement. “California will ultimately need both federal funds and additional state revenues to sustain these essential services.”

Category: Government Affairs, Advocacy News, Economic News, COVID-19