Gov. Gavin Newsom unveils his 2022-23 budget proposal. Image from livestream

Gov. Gavin Newsom on Monday unveiled a proposed $286 billion state budget for 2022-23 that provides major new spending to combat COVID, homelessness and drought while still leaving a multi-billion-dollar surplus.

Boosted by federal pandemic aid and capital gains taxes paid by wealthy Californians as the stock market soared, the budget represents a 9.1% increase over the previous year.

“With a surplus of over $45.7 billion, California is a model for the nation on how we can confront our greatest existential threats and make historic investments in our future,” Newsom said.

He said his budget “fully funds our state’s rainy-day fund and pays down future obligations” while “fighting the climate crisis, taking on persistent inequality and homelessness, keeping our streets safe and more.”

Among the highlights of Newsom’s budget proposal:

  • $2.7 billion to ramp up COVID vaccines, boosters and statewide testing, while increasing the number of medical personnel
  • $2 billion for homeless housing and services and clearing encampments
  • $2 billion in new grants and tax credits to support housing construction
  • $750 million for immediate drought aid to residents, farmers and wildlife
  • $648 million more for firefighting, including new helicopters and bulldozers, along with an additional $1.2 billion for forest management
  • $500 million in tax relief for small businesses suffering from the pandemic
  • $255 million in grants to local law enforcement and to create a new Smash and Grab Enforcement Unit to combat organized retail crime

Two other initiatives, for which Newsom did not specify a cost, include access to healthcare coverage via the Medi-Cal program for all state residents, regardless of immigration status, and a statewide gun buyback program.

The proposal was hailed by Democratic leaders, and Republicans noted that it contained a number of their ideas.

“The Senate’s budget priority is to put California’s wealth to work for those who need it most— middle class families and those struggling to get by,” said Senate President pro Tem Toni Atkins of San Diego. “The governor’s initial budget proposal is in line with that goal, and we are already working to ensure the final 2022-23 budget will meet the needs of the present, build for the future, and reflect the lessons of the past.” 

Senate Republican Leader Scott Wilk of Santa Clarita said, “This budget includes many commonsense Republican requests such as a gas tax holiday, wildfire prevention and forest management, reversing tax increases on businesses, and helping keep business doors open, but so much more needs to be done.”

Because of the large surplus, there is a chance that some of the windfall must be allocated to education and returned to taxpayers under the rarely invoked “Gann limit” enacted in 1979.

The budget will be revised in discussions with lawmakers over the next few months and must be enacted by July.

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Chris Jennewein

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