Governor Gavin Newsom proposed his first state budget today, declaring it a "California For All" budget. In his message accompanying the 2019-2020 budget proposal, Governor Newsom argued the budget would assert discipline by building a strong financial foundation. The proposal includes a 4% spending increase over the prior year, totaling $209 billion, while also increasing general fund spending 3.6% to $144 billion. The budget will increase the total balance in the state Rainy Day Fund to $15.3 billion in 2019-2020, increasing to $19.4 billion by 2022-23.
Despite acknowledging the likelihood of a moderate recession in the near future, Governor Newsom's proposed budget makes significant investments in paying down unfunded retirement liabilities, emergency readiness, response, and recovery, as well as significant investments in health and education. The budget allocates $13.6 billion to paying down the state's unfunded liabilities, including an "unprecedented" $3 billion supplemental contribution to pay down the state's liabilities within CalPERS.
The budget proposes $50 million one-time spending for local grants and to immediately begin a comprehensive, statewide education campaign on disaster preparedness and safety, as well as $25 million for mutual aid to support local governments in their pre-deployment work. In addition, the budget includes $31.3 million to back-fill wildfire-related property tax revenue losses for cities, counties, and special districts.
A full summary of the Governor's Budget Proposal can be found at ebudget.ca.gov. CSDA will provide a review of the areas impacting special districts in Tuesday's eNews.