Governor Newsom Signs $202-Billion Budget
Sacramento, CA – California’s new budget increases spending on emergency response and public health, but borrows against future funds, and shrinks the reserves.
Governor Gavin Newsom signed a $202-billion spending plan that will pull money from emergency funds and temporarily raise taxes on businesses. For example, it caps business tax credit claims to $5-million and it suspends corporate net operating loss reductions.
It avoids cuts to healthcare and education by delaying payments until future years, which could be covered by borrowing from internal funds.
It allocates $5.6-billion in aid to respond to the COVID-19 pandemic, including the purchase of personal protective equipment to reopen the economy and prepare for hospital surges.
The budget also increases spending for wildfire prevention and mitigation, including $85-million to CAL Fire for firefighting resources and surge capacity, and $50-million for community power resiliency.
Newsom says, “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.”
The budget closes a $54-billion shortfall and cuts around $11-billion from state programs.
Many Republicans opposed the budget arguing that it delays tough decisions to future years.