When the COVID-19 pandemic struck, state revenues began to plummet, while spending on unemployment insurance and social programs increased exponentially. The result -- our $21 billion surplus suddenly transformed into a $54.3 billion deficit.
The budget that passed on June 15th was the beginning of discussions between the Governor and the Legislature over a series of trailer bills that implement the budget. Questions remained about how to maintain California’s fiscal solvency without the proposed deep cuts to education, public safety and safety net programs that were on the chopping block. Fortunately, an agreement was reached avoiding many of these cuts, at least for now.
I am concerned about some of the budget’s priorities. For example, funds are included for high-speed rail and for AB 5 enforcement, which will slow recovery by limiting employment options. I am pleased that provider rate increases for those serving Californians with Intellectual and Developmental Disabilities, omitted from last year’s budget, will be provided this year. The budget provides funding for Early Childhood and K-12 Education along with the After School Education and Safety Program. $350 million in new state spending for homeless programs impacted by the pandemic is included, and California’s COVID-19 response will be enhanced, including support for food banks. To protect employers, payroll tax increases on businesses forced to lay off workers will be minimized for at least one year. And counties will receive up to $1 billion to backfill public health and social service costs that skyrocketed during the pandemic.
While this budget has many positives, we can do better. We must prioritize essential services, especially during the current emergency. We must increase efficiencies in all state agencies, so that California can better withstand future economic downturns. Most of all, since state programs and services are financed by revenues generated by a thriving economy, we must protect jobs.