As California faces a landmark budget deficit due to COVID-19’s impacts on the state, Gov. Gavin Newsom presented a revised 2020-21 budget proposal Thursday that looks drastically different from what he originally presented in January.
“This is no normal year,” Newsom wrote in his message accompanying the proposal. “And this is no ordinary May Revision.”
Newsom presented a budget proposal about $19 billion lower than his original, which includes major cuts in several areas. The Legislature has until June 15 to approve a budget.
His original proposal featured $222.2 billion in total state funding, which has now been cut back to $203.3 billion. The portion of the budget going toward general government agencies took the biggest hit.
Here’s a deeper look at some notable changes from January’s proposal to now:
Big Education Funding Decreases
Schools across California have been switching to distance learning programs since they shut down in March due to COVID-19. But public schools’ ability to continue to serve students through this crisis may be in jeopardy as education faces funding cuts in Newsom’s revised proposal, education leaders say.
The revised budget proposal includes a planned 19.9% drop in funding for K-12 education from Newsom’s original proposal. This drop accounts for more than half of the total decrease from the original budget proposal to this one.
Most of Newsom’s proposed K-12 education funding would go toward the state Department of Education.
Newsom’s revised proposal also features a 10.1% drop in higher education funding from his original budget. Planned funding for the UC and CSU systems will be dropping, as will funding for the UC Hastings College of the Law, which is funded separately from the UC system.
However, under the revised budget, the state’s Student Aid Commission will be seeing a $517.7 million increase in funding. The Student Aid Commission works to improve accessibility to post-high school education through financial aid and outreach programs.
Newsom hopes to put plans in place to offset parts of this education funding decline with dollars from other sources, including the federal CARES Act.
A Sign Of The Times
Several state agencies have been feeling the brunt of Californians’ need for support during the COVID-19 pandemic, specifically those related to health care and employment.
The decrease in state funding for Health and Human Services in California was low compared to other sections, with less than a 1% drop.
The biggest losses between the original and revised budget proposals in Health and Human Services are set to be in the Department of Youth and Community Restoration, which is proposed to lose all its state funding. That department is set up to help youth who have been involved in criminal activity transition into adulthood and return safely to the community. Responsibility for juvenile operations is transitioning from the California Department of Corrections and Rehabilitation to this department beginning in 2020-21.
The Secretary for the California Health and Human Services Agency and the Department of Aging also saw substantial drops.
The California Department of Public Health, which has coordinated much of the health side of California’s response to COVID-19, is set to take about a $6.6 million cut from the original to the revised budget, a small drop compared to others.
In the original proposed budget details released in January, the Department of Rehabilitation was set to receive $79,295,000 in state funds. But in the details of the original budget that were re-released Thursday, that original proposed total was reported to only be $75,934,000. We will update this story when we have more information on that discrepancy.
Another section of California’s budget with deep ties to the COVID-19 crisis is Labor and Workforce Development, which includes the Employment Development Department.
The EDD, which handles unemployment insurance in California, isn’t set for any cuts between the original budget proposal and this one. Due to the COVID-19 crisis, Newsom said in his presentation of his revised budget that unemployment in California is expected to peak at around 24.5% overall, and at about 18% this budget year.
In discussing the crisis facing California and its impact on health, education, employment and more, Newsom referred to “dreams quite literally being torn asunder in real time, lives continuing to be lost” and spoke of the “competing and compounding and confounding factors” facing the state.
Some Increases
Notably, one agency section saw about a 2% increase from Newsom’s original budget to this one: Business, Consumer Services, and Housing. Business has been hit hard in California by COVID-19, as many were forced to shut down to stop the spread of the virus in March.
Four departments within this section saw growth in their proposed budgets: the Secretary of Business, Consumer Services and Housing, the Alcoholic Beverage Control Appeals Board, the Department of Consumer Affairs and the Horse Racing Board.
One other category experienced a small bump between January’s proposal and now: Natural Resources.
Under the revised budget plan, the state Department of Parks and Recreation’s budget jumped by more than 25% from the January proposal. Several other departments also experienced increases, while many others, including the Secretary of the Natural Resources Agency, the State Lands Commission and the Department of Fish and Wildlife saw drops in their proposed funding.
It’s All Still In Flux
While Newsom’s revised budget proposal features many cuts that will impact Californians, it’s important to remember that it could all change between now and when the final budget is enacted this summer.
In his presentation, Newsom called on the federal government to step in with funding to help California weather this crisis. He pushed for Congress to pass the HEROES Act, which would allocate nearly $1 trillion for states and cities.
While California is set to face a budget that is very different from what Newsom originally set out in January, Newsom said that the state is entering into this “time of uncertainty” in a much better place than it has in the past.
“We are in a position where I can advance at least a commitment to you that while the numbers have certainly changed, our values remain,” he said.
