Gov. Gavin Newsom in Fresno in 2021. File photo

Last week Gov. Gavin Newsom released details of his $286 billion spending proposal for 2022-23, cushioned by the state’s projected $45 billion surplus.

The spending proposal reveals Newsom’s surplus-spending priorities aimed at Covid-19, homelessness, climate change, health care for undocumented immigrants, education, housing, energy and more. 

The governor’s proposed budget is likely to see many changes by the time it receives final approval in June. 

“This is a proposal. This proposal will be considered in light of the challenges today, and we will be back in light of the challenges that present themselves tomorrow and through May, that I anticipate will look very different from the presentation that I made today,” Gov. Newsom said during a press conference.

Newsom’s proposed budget is receiving praise, and some ire, from some local community leaders. 

Funds needed years ago

Assemblymember Devon Mathis (R-Porterville) said the budget reflected the state’s air of unaffordability, pointing out the announced billions in new spending would require ongoing funding obligations — and would make the state more unaffordable for working families.

Mathis did recognize the budget’s proposal to direct $750 million in drought funding. 

“The Central Valley has some of if not the worst water quality in the state,” said Mathis. “I applaud the proposal to include funds to mitigate our pending drought; however, these funds were needed years ago in order to create opportunities to capture and store this water instead of allowing it to flow unused. Put simply, it’s hard for my constituents to drink dollars; we’ll happily take drinkable water in its stead.”

Covid-19

The state will continue its efforts against Covid-19 as the pandemic enters its third year. To help continue efforts to increase vaccination rates and provide more testing, Newsom’s administration is requesting an early allocation of an additional $1.4 billion to continue these efforts for the rest of the fiscal year. 

The budget also calls for $1.3 billion to continue vaccine distribution and administration, including booster shots and statewide testing. 

Small business investment

During his budget presentation, Newsom lauded California’s $6.2 billion state tax cut, the largest state tax cut in history, and its $4 billion small business grant program, the largest in the nation.

Newsom’s budget commits $3 billion to pay down the state’s unemployment insurance debt—which currently stands at about $23 billion. 

There will be a $1 billion budget for loan guarantees and $500 million for small business tax relief. 

Newsom said that California dominates when it comes to venture capital. According to the California Legislative Analyst’s Office, California firms brought in a record high of $34 billion in the third quarter of 2021.

Even with this activity, Newsom is budgeting $200 million for a venture capital program for underrepresented entrepreneurs.

Expecting the dollar amount to change for the final budget and to have to work with the Legislature, Newsom is marking $150 million to extend the Small Business Covid-19 grant program. 

Newsom said that amount was based on an estimate on how many businesses applied for the grant before it ran out, but depending on how the pandemic plays out, the dollar amount could change. 

Some $45 million is planned to help promote tourism in California.

To help stimulate business growth, $40 million will be budgeted for the state to continue to waive filing fees for new businesses, $26 million for technical assistance funds for new businesses, and $20 million for Accelerate California (IHub2), a program from the California Office of the Small Business Advocate to help accelerate technology and science-based firms in underserved regions and with diverse backgrounds.  

Expand the workforce

To help support California’s economic growth, Newsom’s proposed budget details a strategy to train workers critical to the growth, and especially to meet growing demands for teachers and health care workers. 

On the education front, investments will start in the K-12 school system. 

The budget calls for a $1.7 billion investment to expand California’s health and human services workforce, including training strategies to increase the state’s workforce of nurses, social workers, emergency medical technicians, behavioral health care providers and community health care workers. 

Climate and energy

The budget does specify a workforce investment focused on climate change — $35 million for the University of California system to create regional workforce development and training hubs focused on climate change and $30 million for the California Community College system to train and certify forestry professionals. 

To support workforce development programs that align with the state’s environmental goals, the budget plans $60 million over three years for the California Workforce Development Board’s Low Carbon Economy Workforce grant program.

A $2 billion investment over two years is budgeted to help meet the state’s clean energy goals by providing incentives for long-duration storage projects, renewable hydrogen, industrial decarbonization, electrification of existing buildings in disadvantaged communities and infrastructure improvements to help develop offshore wind energy production. 

Some $1 billion is proposed to provide cooling in low-income homes through the installation of all-electric heat pumps to help cut pollution levels. 

Health care

A more notable detail in Newsom’s budget is his plans for the health care sector.

The budget highlights the state’s improvements in its health care system in recent years—expanding Covered California for the middle class, increasing access to Medi-Cal, and taking action to reduce prescription drug costs, but this year’s budget is more ambitious. 

Newsom’s proposed budget calls to make California the first state to provide universal access to health coverage for all low-income Californians, regardless of immigration status. It would be implemented in January 2024 if the budget is approved. 

The budget proposed $30 million to create the Office of Health Care Affordability to increase the transparency of pricing, creating cost targets for different sectors of the health care industry and imposing financial consequences for entities failing to meet specified targets. 

Some $400 million is included for provider payments meant to close equity gaps for children’s preventative care measures, maternity care, depression screenings and follow up behavioral health visits. 

The budget includes $53 million in general and federal funds to reduce Medi-Cal premiums for children, pregnant women and working disabled adults. 

The Fresno Madera Medical Society, in conjunction with the California Medical association, is a non-profit organization that strives for the betterment of the medical profession. 

Fresno Madera Medical Society President Dr. John Moua said the governor’s call for universal health care in the state will be particularly beneficial to areas like Fresno and Madera, where many residents are uninsured, underinsured, or do not currently qualify for assistance. 

“Physicians and all healthcare providers strongly advocate for access to care for all and commend the Governor for making healthcare a priority in his proposed budget. Perhaps most importantly though, we need to be mindful that a large component of increasing access to quality health care requires that we address the physician shortage in California and particularly in the Central Valley,” Moua said. 

Assemblymember Dr. Joaquin Arambula (D-Fresno), who himself has championed universal health care bills in the past, said Newsom’s proposed bill will be transformative for hundreds of thousands of Californians. 

“COVID-19 has shown clearly how imperative it is to bring equity to our health care system, especially as the pandemic killed and struck Latinos and other ethnic minorities the hardest as well as those living in our most vulnerable communities,” Arambula said. “I’m proud that California continues to lead the way in improving the quality of life for people. This expansion is nothing short of life-changing.”