What to know about Newsom’s spending plan
That pact was rejected by the Office of the Legislative Analyst this winter, saying it “has the fundamental problem of circumventing the legislative branch of government.”
This is not the only area of possible disagreement with the Legislative Assembly. Although Newsom agreed to a three-year, $2 billion grant last year to build student housing, lawmakers want more. An Assembly bill calls for $5 billion in interest-free loans for public campuses to build more housing for students and faculty. Another Senate proposal wants an additional $1.5 billion for the housing subsidy.
The Senate also requested $400 million more in continued support for Cal State’s system and $200 million more for UC — not reflected in Newsom’s May proposal. Nor did he set aside the additional hundreds of millions of dollars needed to expand the Cal grant to 150,000 students, which is what top lawmakers are seeking. Newsom vetoed a similar proposal last year. Support for a down payment on a debt-free grant is still in place, but not at the level desired by the Senate.
Injection of funds for health insurance
If Congress doesn’t act, the COVID-era federal premium subsidies for Covered California, the state’s Obamacare health insurance exchange, will expire at the end of this year.
Newsom’s update proposes $304 million to offset these cost increases for middle-income families. That total is lower than what Senate leaders have proposed by $238 million. Without action, about 220,000 residents would lose their health insurance under the state’s individual market, according to the Berkeley Labor Center.
The governor also hasn’t budged on his timeline for expanding Medi-Cal for undocumented adults ages 26 to 49, despite calls to enact the changes sooner. Its initial expansion sets a start date in early 2024 and calls for $819 million next year and $2.7 billion annually to support the expansion. The Senate budget plan proposed an additional $1 billion next year to extend the deadline by six months. The Medi-Cal expansion is a linchpin of Newsom’s earlier support for a state-run, single-payer health care system, which died without a vote earlier this year.
“The steps we’ve taken are more progressive than any state in the United States of America,” Newsom said when asked why this budget didn’t include a single-payer proposal. He noted that his administration is working to overcome significant tax and legal hurdles that stand in the way of directly providing insurance to all Californians.
Newsom also offered $2 billion to fund the state’s COVID-19 strategy known as the SMARTER plan. That includes $530 million for testing and lab costs, $158 million to implement the federal COVID-19 drug program, and $468 million to support migrant services at the Mexican border.
Healthcare workers also received a sought-after reward: $933 million for one-time retention bonuses. The state would distribute $1,000 checks to 600,000 hospital and nursing facility workers, with an additional $500 in matching from employers. Previous attempts to allocate money for health care worker hazard pay have been blocked in the Legislature even as hospitals have warned they are relying on COVID-positive workers to meet demands for point.
“We want people to stay in their current occupation and we want them to continue to thrive in it,” Finance Department Director Keely Bolser said.
A little more about accommodation
To address California’s homelessness crisis, Newsom added $700 million to its $2 billion originally proposed in January — and the $12 billion announced last year — to fund mostly stopgap solutions, such as small houses and camp clean-ups. However, there was no long-term extension of the flexible grants included in last year’s budget that local governments were seeking.
One person’s ‘flexible’ is another’s ‘irresponsible’, Newsom said: ‘It’s understandable that they want more funding, they want more predictability. But it’s also understandable that you as taxpayers are waiting for their plans. »
In response, a coalition of mayors from California’s 13 largest cities led by Oakland Mayor Libby Schaaf tweeted that flexible funding for the homeless “remains our top priority.”
Newsom has also offered $65 million to administer CARE Court, his proposal to compel severely disabled people into treatment, which is currently making its way through the Legislature.
On the housing front, Senate Leader Atkins’ ambitious 10-year, $10 billion proposal to boost homeownership did not go down well with Newsom’s revised proposal. Instead, he added $500 million to the previously proposed $2 billion housing budget to primarily fund the conversion of vacant malls and storefronts into homes.
Echoing his Republican challengers in last year’s failed effort to remove him from office, Newsom blamed the housing crisis on the state’s first environmental law – but offered little change. Instead, he said he has signed 17 CEQA reform bills into law and looks forward to working with lawmakers on other proposals that provide more certainty and predictability to address housing affordability issues.
CalMatters reporters Rachel Becker, Julie Cart, Grace Gedye, Joe Hong, Kristen Hwang, Jeanne Kuang, Nadia Lopez, Byrhonda Lyons, Manuela Tobias and Mikhail Zinshteyn contributed to this story.