California Gov. Gavin Newsom’s office submitted the 2021-22 state budget to the state Legislature on Friday.
The $227.2 billion budget, which comes amid record numbers of COVID-19 cases, includes a $14 billion investment in the state’s economic recovery and establishes the Golden State Stimulus program, which will provide low-income Californians with direct payments of $600, according to a press release from the governor’s office. It also allocates $372 million to facilitate the administration of vaccines across California.
The budget will provide the UC system with $136.3 million of ongoing support under the assumption that there will be no increases in tuition and fees for California residents. The funding includes $103.9 million to restore part of the $300.8 million reductions that the UC system suffered last year, according to a press release by the UC Office of the President.
“The proposed 3% permanent funding increase for UC will strengthen core educational programs for all students, with targeted investments in basic needs, digital equity, financial aid, and mental health that will greatly benefit UC’s most marginalized students,” said UC Student Association President Aidan Arasasingham in an email. “In a moment when students and families are struggling, Governor Newsom’s rejection of tuition increases and support for financial aid expansion is greatly appreciated.”
Despite the economic impacts of the COVID-19 pandemic and the lockdown, the budget is the largest in the state’s history. In the governor’s office press release, Newsom said the funding is made possible by the $15.6 billion rainy day fund enacted in 2012 through Proposition 2. The state is currently operating with a $15 billion surplus, he added in the same press release.
The federal government will likely provide the state with an additional $100 billion, Newsom said during a livestream of the budget announcement. The budget forecast, which was finalized before the provisions of the federal Coronavirus Response and Relief Supplemental Appropriations Act, will be updated in May to reflect the act’s impacts, according to the budget summary.
Last year, California experienced a $54.3 billion state budget deficit, leading to Newsom’s announcement of an emergency budget. This year, by contrast, the state reserves are expected to grow to $22 billion in surplus. The surplus can then be used to address future deficits.
Expenditures are projected to outpace revenues, according to the budget’s general fund multi-year forecast. The budget summary predicts a deficit of $7.6 billion in 2022-23.
“The Budget continues to reflect the principle that maintaining a balanced budget and strong budget resiliency is a necessary predicate for expanding programs, especially given the increased uncertainty caused by the COVID-19 pandemic,” Newsom said in the budget summary.