Governor Newsom's May Revise budget projection for the coming Fiscal Year shows that the $21 billion surplus we had has become a $54 billion deficit in our state budget!

The economic activity that generates tax revenues supporting state programs has collapsed because of Covid-19. We are now in a serious recession, with unemployment levels greater than those of the Great Depression. It is imperative that we safely open up our economy to reduce the hit on our economic outlook and help Californians recover.

I’ve joined a group of western state leaders asking the federal government to provide funding to help make up this shortfall and support public safety, local governments, schools, hospitals and Medi-Cal. Unlike the federal government, California cannot print its own money. State tax revenues have decreased, while the demand for state services, including unemployment insurance, has increased exponentially. 

Safety is essential.  We’ve learned a lot over the past months, and protocols like social distancing have allowed essential businesses to remain open. Thousands of customers safely visit local big box-stores each week; there’s no reason those same protocols can’t be used by smaller businesses with far fewer customers.

A regional approach is best as local county health authorities should make the call. Many businesses have learned to think outside the box, and they should be given the chance to open safely. We’ve been saying we’re all in this together, but in thousands of cases, small businesses have been forced to carry the heaviest burden.  

From public safety (fire season is upon us) to education, from highway funding and Medi-Cal to programs for the elderly, the disabled and handicapped, all state programs are facing disastrous cuts. The social costs of allowing our shutdown to become a depression are incalculable. By using caution and the lessons we’ve all learned, California’s economy can safely reopen.