Gov. Newsom released his revised version of the state’s budget

SAN DIEGO (KUSI) – San Diego County’s state legislators largely praised Gov. Gavin Newsom’s revised fiscal year 2019-20 budget today for its efforts to tackle high health care and housing costs, prepare for the next economic crisis and invest in the state’s future.

In January, Newsom released his first budget since becoming governor, a $209 billion fiscal plan that included a $144 billion general fund and a projected surplus of $21 billion, the state’s largest since at least 2000. The budget included $1.3 billion for housing development and $40 million to fund two full years of tuition for first-time community college students who are enrolled full-time.

Newsom’s revised budget, released Thursday, ticked up to $213 billion and builds on the first spending plan by increasing funding for things like housing development and homeless assistance while adding billions to the state’s rainy day fund, which could reach as high as $16.5 billion if state revenue trends remain consistent. The revised budget also includes a slightly higher projected surplus of $21.5 billion.

“The affordability crisis families face in this state is very real, and that’s why this budget tackles those challenges head-on by focusing on housing, health care, early childhood and higher education,” Newsom said.

Sen. Toni Atkins, D-San Diego, lauded Newsom for the revised budget’s gains on its predecessor. Atkins, the Senate president pro-tem, also expressed confidence that the state Legislature would finalize a budget “that will make a real difference for Californians.”

“The May budget revision reflects California’s fiscal strength, increases our prudent reserves, and makes important investments for the future,” Atkins said. “I am particularly pleased to see more funding for K-12 education and increases for the Earned Income Tax Credit to help even more working Californians.”

But Sen. Pat Bates, R-Laguna Niguel, called the water tax and other new taxes “unfortunate, unhelpful and unnecessary,” arguing that it is unnecessary with the state’s projected surplus and will hurt residents who are already near the poverty level.

Bates also railed against Newsom’s proposal to withhold gas tax funds for transportation infrastructure upgrades if cities around the state don’t build enough housing.

“His insistence to hold gas tax dollars hostage from local governments unless they do what he wants proves that the gas tax increase was a bait-and-switch on voters,” Bates said. “Promises made to voters on transportation must be promises kept.”

Bates allowed that the budget includes provisions worth supporting, such as assistance for low-income families and funding to modernize the state’s public schools.

“Making these priorities a reality will help all Californians,” she said.

Newsom’s revised budget contains $81.1 billion for education and expands family services and programs like paid family leave, allowing up to eight weeks of paid leave for each parent.

The budget also includes a provision that would eliminate sales tax on diapers and tampons, a cause that Assemblywoman Lorena Gonzalez, D-San Diego, has championed for years. Newsom estimated the repeal would cost the state roughly $35 million, which is likely to be recouped through other tax increases and state funding within the budget.

“This tax relief will go a long way in helping those young families who we know are at their most economically vulnerable,” Gonzalez said. “In California, more than 50 percent of the children born are on Medi-Cal. … We know that diapers are a necessity not only for the health of the child, they’re also required in order to drop your child off at child care.”

The revised budget also includes controversial new levies and proposals such as a tax on drinking water, which would fund cleanup efforts in communities without access to potable water. Roughly one million California residents don’t have access to clean drinking water, according to Newsom.

The state legislature will now begin its final negotiations with Newsom’s office over the revised budget. The final spending plan must be approved by June 15.

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