Written by Gordon Webster, Jr.
With the state’s reopening this Tuesday, it might be easy to get distracted from such matters as the California budget and the Rainy Day Fund.
While the lifting of business restrictions — if not the lifting of Gov. Newsom’s state of emergency — is a bright, shiny object to behold, replenishing the state’s Budget Stabilization Account of $7.8 billion is necessary to prepare for the next emergency on the horizon.
As reminded by Republican Lawmakers in a letter to Newsom, the state budget borrowed $7.8 billion from the Rainy Day Fund last year to fund essential programs in the face of a projected $54.3 billion budget deficit. That deficit never materialized, and today the state anticipates a $76 billion revenue windfall. About $38 billion can be spent at the Governor’s and Legislature’s discretion.
“This $38 billion surplus presents a unique opportunity to build California’s budget resilience, set a clear path to economic stability, and restore our reserves before the next inevitable crisis. Yet, neither your May Revision, nor the legislative budget proposed by Senate and Assembly Democrats, include funding to pay back the $7.8 billion withdrawal, as recommended by the nonpartisan Legislative Analyst’s Office (LAO),” according to the letter to Newsom signed by a couple dozen Sacramento lawmakers.
Before Sacramento embarks on yet another breathless effort to expand spending in the state, the Rainy Day Fund must be replenished.