Despite a constitutional requirement to pass a new spending plan by June 15 or lose their paychecks, the California State Legislature was unable to reach a deal with Gov. Gavin Newsom on Monday and instead passed a separate budget framework of their own.
The placeholder budget addresses the projected $54.3 billion deficit caused by the coronavirus pandemic, but is unlikely to be signed by Newsom as lawmakers and the governor remain at odds about how to prevent severe cuts that would affect the state’s neediest citizens.
The budget passed by votes of 61-13 in the Assembly and 29-11 in the Senate, with most Republicans opposed. The Legislature’s spending plan rejects Newsom’s proposed cuts to public education and health care with the hope that a bailout from Congress is on the way to cover the shortfall.
While Newsom’s proposed budget covers the deficit by making those cuts, the Legislature’s plan would cover the deficit by borrowing more from some of the state’s restricted funds, taking more money from the state’s savings accounts and delaying billions of dollars in payments to public schools. Districts would be able to spend the money in the meantime, and the state would pay them back at a later date.
Senator Andreas Borgeas voted “no” on the placeholder budget Monday, noting that it is “neither disciplined nor fiscally prudent.”
"Despite the state struggling to emerge from both economic and public health crises, the legislative majority's budget adds more than $9 billion in new taxes on California businesses. Businesses and employees are struggling to survive and more taxes will only prolong this fiscal crisis,” Borgeas[AM1] said. “Surprisingly, California leaders are moving forward without an economic recovery plan. Therefore, I respectfully requested the Governor and Legislative leadership to create an economic recovery plan that includes increased economic investment as well as proposed cost savings before even considering any tax increases.”
Assemblyman Heath Flora said that Monday’s Legislature-approved budget and its attempts to close the deficit “merely defer difficult decisions about reducing state spending and will only create larger budget deficits in the future,” but applauded lawmakers’ exercising their constitutional authority to provide fiscal oversight of state spending.
“I’m proud that the Legislature has been able to serve as a check on the Executive branch, which has been given extraordinary power in the months since the COVID-19 pandemic and economic shutdown began,” Flora said. “As a coequal branch of government, we have an obligation to ensure that every taxpayer dollar is spent wisely and appropriately.”
Assemblyman Adam Gray was grateful that the budget provides $15 million per year every year to support a medical school at UCSF-Fresno and UC Merced, though the funding is not yet set in stone.
“Earlier this year, I said that a UC medical school in the Valley should be the legacy of this pandemic, not one of its victims. Today, that legacy became a reality,” Gray said. “This represents the culmination of decades of tireless work and advocacy that will radically change the health care landscape in the San Joaquin Valley.
“…When I requested that $1 million be included in the 2015 State Budget to study how to establish a UC medical school in the Valley, I could not have predicted we would be as far along as we are today. By leveraging the incredible resources already available at UCSF-Fresno and UC Merced, we found a path to a medical school in years instead of decades and for millions instead of billions.”
Newsom has until July 1 to approve a budget.