10 Ways to Make Governor Newsom’s Proposed Budget More Equitable

Governor Gavin Newsom released the May Revision to his proposed 2021–22 state budget — also known as his “California Comeback Plan” — and much attention is being given to the number of proposals and large dollar amounts. The governor’s latest proposal and the economic position California finds itself in today are striking given the global pandemic and recession.

California’s state leaders have more than $100 billion in funds available to be invested over the current budget, and future years. Broken down, the Newsom administration is projecting $75.7 billion in additional revenues over the current fiscal year (2020–21) and budget year. This includes $38.1 billion in discretionary funds and $37.6 billion in constitutionally required obligations for K-12 schools and community colleges, as well as for reserves and paying down certain long-term liabilities. Adding to that, state leaders have $27 billion in direct federal aid from the American Rescue Plan.

The question all Californians should ask state leaders: Will policymakers seize this opportunity to make bold investments that create a more equitable California where all people can thrive regardless of age, race, or zip code?

To be sure, Governor Newsom’s revised budget uses much of the state’s windfall gains to help Californians with low and middle incomes and people of color, such as through direct cash aid, rental assistance, and utility debt assistance. But these are largely one-time investments.

Ongoing support is critical for the state and its people to truly move forward.

But systematic racism, classism, and sexism have blocked millions of Californians from health care, affordable housing, job opportunities, and wealth for generations, and ongoing support is critical for the state and its people to truly move forward.

California’s large revenue gains are driven by high-income Californians and corporations thriving amid the COVID-19 pandemic, while millions of Californians with low and middle incomes have struggled to pay the rent and put food on the table as a result of lost employment and income. Millions more have been struggling to balance the pressures of work, caregiving, physical and mental health, and educating their kids for the past 15 months. Federal and state cash assistance has helped to mitigate more dire expectations of economic decline from layoffs, evictions, and closures of small businesses and nonprofits.

Economic struggles remain for the vast majority of Californians.

Still, economic struggles remain for the vast majority of Californians, and will for months, if not years to come. At the current pace of job growth, it would take another 18 months before the state recovers the jobs lost since February 2020, and forecasters expect it to take several years for the lowest-paying industries to rebound.

Now, with so much funding available state leaders have an opportunity to do so much more for Californians.

Here are 10 ways that state leaders can make the 2021–22 budget even more equitable.

  • Provide ongoing funding for local public health departments that have requested $200 million in ongoing support to rebuild workforce and infrastructure before the next public health crisis and help advance health equity.

California’s state leaders have a once-in-a-lifetime opportunity to make bolder investments to create a more equitable California. The policies state leaders advance and the legacy they build must be focused on ongoing investments in the Californians left out of our state’s economic successes. This is how policymakers can build a stronger, more equitable, and more sustainable economic future for our state and its people.

Independent policy research, analysis, and commentary with the goal of helping create an economy that works for all Californians.