California budget: more for the homeless, less for the climate

SOPHIE AUSTIN AND JANIE HARE
Associated Press

SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom proposed a $297 billion budget on Tuesday, prioritizing money to address homelessness and education, and cutting some climate spending amid a projected $22.5 billion budget deficit.

The proposed budget, which will go into effect on July 1, is about $9 billion less than it was in the current fiscal year, when Newsom ran a huge surplus.

One of the reasons California is not generating as much revenue as expected is that rich taxpayers are making less money due to a weakened economy and a faltering stock market.

Newsom’s proposed budget will change as tax revenue arrives later this year, and will not go into effect until July 1 at the earliest.

HOW DOES NEWSOM WANT TO COVER THE LOSS?

Through a combination of deferred spending, cost transfers and cutbacks.

Newsom wants to defer the $7.4 billion spending to future years. He wants to move spending $4.3 billion to other accounts outside the state’s general fund and limit borrowing another $1.2 billion.

Newsom proposes $9.6 billion in spending cuts. Of these, $5.7 billion will be permanent cuts. The rest of the $3.9 billion cuts could come back if there is more money in the state budget than currently expected.

The cuts run across the entire budget, including cuts to some of Newsom’s ambitious climate proposals. But most of the state’s core programs and services, including public education and major health care assistance programs, were unaffected.

HOUSING AND HOMELESSNESS

Even with a reduction in income, Newsom is allocating more money to address the problem of homelessness. His proposal includes $3.4 billion for the homeless, $400 million to clean up tent cities, and $1 billion for cities and counties to reduce the number of people living outdoors.

He has repeatedly told local officials that they won’t get the money until they come up with bolder plans to reduce homelessness and residents begin to see the difference on the streets.

Newsom isn’t holding back on building more housing, given the state’s homelessness crisis is linked to a dire shortage of new construction. His administration pushed for policy changes to make it easier to build new homes and became more aggressive in ordering cities and counties to build more homes.

But the proposed budget includes a $350 million cut in loans, technical and other assistance to new home buyers.

CLIMATE CHANGE AND THE ENVIRONMENT

California has already set its sights on achieving carbon neutrality by 2045, meaning the state will remove as much carbon emissions from the atmosphere as it emits itself.

But Newsom proposed cutting what the state plans to spend on climate over five years by $6 billion. This will include $4.6 billion in spending cuts in the coming fiscal year, said Sergio Aguilar, assistant program budget manager at the California Department of the Treasury.

The changes will include cutting back on investment in the state’s plans to make zero-emission cars more affordable for low-income neighborhoods and move trucks, planes and train tracks away from greenhouse gases. It comes at a time when the state is promoting a massive transition from gas-powered vehicles to battery-powered vehicles.

EDUCATION

California is required to spend a certain minimum on education, defined by a 1980s constitutional amendment known as Proposition 98. This means that the proposed total spending for the coming fiscal year is similar to last year’s.

The proposal includes $604 million to expand access to transitional kindergartens, in addition to funding the gradual transition of public preschool providers to serve at least 10% of students with disabilities by July 1, 2024.

Last fall, Newsom rejected a bill that would have made attendance at kindergarten mandatory before students enter first grade in a public school, citing the costs associated with the proposal.

This will delay the allocation of $550 million to the School Facilities Support Program to provide transitional kindergarten, full-time kindergarten, or preschool classes until 2024.

HEALTH AND SOCIAL SERVICES

Newsom’s proposal supports plans to provide health care to low-income adults aged 26 to 49 regardless of immigration status as of January 1, 2024, and to expand mental health services for children and adolescents.

The budget also supports more than $1 billion a year to provide higher cash benefits through the CalWORKS program for individuals with disabilities, seniors, children, and low-income families.

Newsom has offered additional funding to counties and courts to implement the controversial mental health courts program he has promoted to treat homeless people with schizophrenia or bipolar disorder, even if it is against their will.

The proposed budget includes $93 million from the opioid settlement fund over four years, most of which is intended to increase the distribution of naloxone to first responders to address fentanyl and opioid overdoses.

After a significant increase in the number of subsidized childcare places last year, Newsom said on Tuesday he wants to defer 20,000 of those places for one year to balance the budget. Newsom’s administration says many of the new vacancies that came up last year have yet to be filled.

__

Har reported from San Francisco.