Democratic gubernatorial candidate Gavin Newsom gives his opening statement in a debate. Photo by Chris Stone

Gov. Gavin Newsom proposed a $209 billion state budget Thursday that is 4 percent higher than the last one signed by former Gov. Jerry Brown.

Newsom described his first budget as a “fiscal blueprint that builds a strong financial foundation” by earmarking $13.6 billion to build reserves and pay down both state debt and unfunded pension liabilities.

“To make the California dream available to all, our state must be fiscally sound,” he said. “This budget lays a strong financial foundation for our state by eliminating debts, expanding the rainy-day fund and paying down our unfunded liabilities.”

The budget also includes increased tax credits for working families, incentives for affording housing construction, initial funding for universal preschool and a commitment to two years of free community college education.

The state’s general fund is budgeted at $144 billion, compared to $138 billion in Brown’s last budget. Along with $65 billion for purposes earmarked by voters, the total comes to $209 billion.

Among the specific budget amounts:

  • $4.8 billion to build reserves, bringing the state’s rainy-day fund to more than $15 billion this year
  • $4.8 billion for the state’s primary pension funds, CalPERS and CalSTRS, both of which have significant unfunded liabilities
  • $1 billion in increased tax credits for working families
  • $1.3 billion for housing development, including tax credits for developers constructing housing for low- and moderate-income families
  • Funding for universal preschool for all income-eligible four-year-old children in the state, phased in over a three-year period
  • The highest funding ever — $80.7 billion — for K-12 schools and community colleges to support two years of free community college education

The budget drew an initial positive response from both Democrats and Republicans in the state Legislature.

“Senate Democrats are encouraged to see thoughtful, progressive initiatives in Gov. Newsom’s proposed budget that can make a difference in the lives of Californians,” said Senate President pro Tempore Toni Atkins, who represents the San Diego area.

“We are pleased that the governor shares our commitment to investing in early childhood and higher education, affordable housing, alleviating poverty and homelessness, expanding access to health care, paid family leave and the Earned Income Tax Credit, and overhauling California’s emergency preparedness,” she said.

Senate Republican Leader Patricia Bates, who represents parts of north San Diego and south Orange counties, saw “a lot to applaud” in the budget.

“In Gov. Newsom’s first budget there is a lot to applaud, including expanded efforts to pay off debt, build the state’s reserves, and increase the Earned Income Tax Credit,” Bates said.

But she said Republicans “remain concerned with massive unfunded liabilities and also the new proposals to expand services and obligations that the state will not be able to afford when the economy slows down … Hopefully the final budget will reflect more caution.”

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Chris Jennewein

Chris Jennewein is Editor & Publisher of Times of San Diego.