CA Gov. Gavin Newsom details significant changes in budget revision

California State Capital
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California Gov. Gavin Newsom introduced the state budget’s May revision Thursday, with significant budget cuts in funding for education, judicial processes and natural resource management.

Amid the COVID-19 pandemic, the state is experiencing a $54.3 billion budget shortfall, which is a 22.3% decrease in revenue from the January budget proposal. Newsom said the May revision will fund California’s “most essential priorities”: public education, public health, public safety and the people most affected by COVID-19.

“A global health crisis has triggered a global financial crisis — threatening both lives and livelihoods across the nation and world,” Newsom said in the revision’s summary. “This is no normal year. And this no ordinary May Revision.”

To address the $54.3 billion shortfall, Newsom proposed achieving a balanced budget by pulling back “enhancements” — proposals on the January budget that the state no longer has the capacity to do — in addition to using more than $17 billion of reserves and federal funding, borrowing or deferring other money and creating $4.4 billion in new revenue.

The proposal also includes $14 billion in cuts that could be avoided, according to Newsom, if the federal government passes the Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act, which would distribute $1 trillion in direct relief to state and local governments.

“The enormity of the task at hand cannot just be borne by a state,” Newsom said at a press conference. “The federal government has a moral, ethical and economic obligation to help support the states. After all, what is the point of government if not to protect people, their safety and the well-being of citizens?”

The $14 billion of potentially negated cuts makes up 26% of the balanced budget, according to Newsom, and includes declines in Proposition 98 funding, which guarantees minimum funding levels for K-12 schools and community colleges, as well as reductions in allocations for local child support agencies, state parks and programs for adult reentry after incarceration.

It also includes a 10% reduction in the budget for state-funded higher education, such as the UC system.

“Nothing breaks my heart more than making budget cuts,” Newsom said at the press conference. “There’s a human being behind every single number. Behind every category is a dream that is either deferred or, in some cases, a dream that is denied.”

There is an anticipated $19 billion impact on the education sector, according to Newsom. He added that to mitigate this, the state will use Coronavirus Aid, Relief and Economic Security, or CARES, Act funding and Prop. 98 reserve money to address the issue of learning loss and socioemotional challenges related to COVID-19.

Berkeley Unified School District spokesperson Trish McDermott said the revision also suspends the required annual cost-of-living adjustment and includes reductions to a variety of grant programs, leading to a possibility of $7 million in cuts for the district.

UC Berkeley is expecting a cut of $41 million from the state government and is currently projecting a total loss of $200 million to $300 million, according to campus spokesperson Dan Mogulof. He added that UC Berkeley is evaluating options such as withholding merit-based pay increases for nonrepresented staff and cost-of-living increases for union-represented staff, as personnel costs make up 68% of the campus budget.

“We continue to look at all other means of budget relief that does not adversely impact our students and employees,” Mogulof said in an email. “We will continue to advocate strongly for additional resources from the federal government as they consider future COVID-19 relief packages.”

UC President Janet Napolitano said in a press release that she appreciates the January budget’s “strong investment” in higher education but added that she is issuing a salary freeze for some staff and is taking a 10% pay reduction along with the 10 UC chancellors in response to the loss of $372 million in funding for the UC system.

Despite all the cuts, certain categories are still being prioritized during this time. The California Department of Forestry and Fire Protection is receiving increased funding to protect public safety as wildfire season approaches.

The revision also includes a 10% increase in funds for skilled nursing facilities for four months, as well as funding for in-home supportive services during the COVID-19 pandemic. California is also allocating CARES Act funding for public health and safety and continuing to invest in Project Roomkey, which provides motel and hotel rooms for homeless individuals.

“UC students will be looking to the federal government to meet its responsibility during these times to provide our state with vital aid to help support our state,” said UC Student Association President Varsha Sarveshwar in a press release. “Now, more than ever, we must protect and invest in UC students to lead the way toward future recovery.”

Contact Megha Krishnan and Maria Young at [email protected].