Balancing state budget a key priority

(Jan. 27, 2023) — This month, Gov. Gavin Newsom released his first budget proposal for 2023-’24. In the coming months, the administration and my colleagues and I in the Legislature will engage in a series of public hearings and meetings to achieve consensus and pass a final budget before the June 15 constitutional deadline.

It goes without saying, but the social and economic impacts of the pandemic hit Californians hard – especially our most vulnerable communities. The last few years have reminded us all just how quickly our economic fortunes can change.

The administration currently forecasts a $22.5 billion deficit in 2023, compared to last year’s nearly $100 billion surplus. It is clear that we are in drastically different budget times.

One challenge is that California’s state tax revenues are highly dependent upon capital gains that generally come from stocks, bonds and other investments. Newsom, along with many economists, have correctly characterized these as “inherently unpredictable.” In the absence of sufficient reserves, the combination of volatile revenues from unpredictable sources is lethal to a budget that must provide predictable funding to public services.

I am proud that the state has planned for this moment and currently has nearly $37 billion in our General Fund and Rainy Day Fund reserves. However, I firmly believe that we must be judicious with our spending and decision-making, saving money where we can so that we can protect critical programs – such as schools, public safety, social safety nets and state healthcare – from draconian cuts of years past.

In addition to being prudent with our reserves, I’ve been outspoken in our need to use the state’s budget to create jobs and revitalize our economy, support small businesses, address our housing and homelessness crises and deliver real support for families across our state.

Homelessness

When it comes to housing and homelessness, I was glad to hear the governor renew his commitment to helping shelter homeless individuals, and to clean up trash that unfortunately surrounds abandoned encampments and our local streets and highway underpasses.

However, Newsom also initially proposed cutting $100 million from the CalHome program, which provides grants for agencies and nonprofits to help lower-income communities become or remain homeowners. This $100 million was part of a funding promise I helped secure in last year’s budget, and important organizations like Habitat for Humanity are counting on this funding to help get families into homes. Our already dire homelessness crisis will only worsen if we lessen our efforts to support families who are at-risk of losing the roofs over their heads.

This is just the beginning of a long process to deliver a balanced state budget, and I look forward to working to ensure that we pass a budget that reflects our state’s and community’s values.

If you would like to learn more about my fiscal and budget priorities or connect with me on matters that are important to you, contact my district office at 925-521-1511.