Last week, Gov. Newsom presented his May Revision budget for the 2020-21 fiscal year.
The spending plan includes new priorities that reflect a projected $54.3 billion budget deficit brought on by the COVID-19 pandemic. It has $14 billion in spending cuts, including a 10 percent salary reduction for state workers. The pay cut would be triggered only if the federal government does not provide funding to California to cover some of its coronavirus losses before the fiscal year begins July 1.
There are also billions in cuts to education and Medi-Cal services in the proposal.
“The federal government has a moral and ethical and economic obligation to help support the states,” the governor said. “This is an opportunity to make real our purpose and advance our values. Federal government, we need you. These cuts can be negated. They can be dismissed with your support.”
Gov. Newsom also expressed support for the U.S. Congress’ Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which the U.S. House of Representatives passed on May 16.
The $3 trillion legislation includes another round of $1,200 stimulus payments to individuals, an extension of the extra $600 per month in unemployment benefits, and nearly $1 trillion in assistance for state and local governments.
The HEROES Act also includes a new forms of aid–$200 billion in “hazard pay” for essential workers, $75 billion for COVID-19 testing and contact tracing and a $75 billion fund to help homeowners with mortgage payments and property taxes. It would also extend student loan relief to borrowers with private loans, who were left out of the CARES Act relief.
Assemblymember Shirley Weber (D-San Diego), who serves as chair of both the California Legislative Black Caucus and the Assembly Budget Subcommittee on Public Safety, joined the governor and other state leaders calling on the federal government to lend California a helping hand.
“As the Governor said, what we are facing is unprecedented,” said Weber. “Fortunately, the Legislature has worked to reduce the impact through investing in reserves and a rainy-day fund. We will, however, need the help of the Federal government and the passage of the HEROES Act to ensure that we get back on a more secure footing to recover from the economic impacts of COVID.”
The aid efforts for essential workers and testing included in the HEROES Act would proportionally affect more Black Americans, as studies have shown that Black people are more likely to be essential workers, and more likely to live in urban areas hit hard by the virus.
The Congressional Black Caucus championed the concerns of Black households and businesses, sending out a press release that outlined a proposal submitted to House and Senate leadership on April 29.
“The proposal includes policies to safeguard social safety net benefits; keep Black businesses afloat; support students and educational institutions; address health care inequities; strengthen infrastructure in the Black community; protect Black farmers; keep people in their homes; ensure incarcerated individuals are protected; and much more,” the Congressional Black Caucus press release reads.
The Western States Pact — a regional coalition that includes California, Washington, Oregon, Colorado, and Nevada — sent a letter to Congress asking for one trillion dollars in state and local government aid on May 11. The California Labor Federation, California State Association of Counties, League of Cities and California Travel and Tourism Coalition have also endorsed the HEROES Act for its inclusion of state and local government aid.
Senate Majority Leader Mitch McConnell told reporters May 12 that Republicans will insist on “narrowly targeted legislations” and that there’s no urgency to pass any COVID-19 relief bill any time soon. President Donald Trump commented that there’s “no rush” to pass another bill.
Republicans in the California legislature have also expressed skepticism about the governor’s budget plan.
“While additional federal assistance can help cover some of the deficit, expecting Uncle Sam to come to the rescue is wishful thinking,” said Sen. Patricia Bates (R-Laguna Niguel).
“Raising taxes makes no sense when many families and businesses have significantly less income to live with. That is why a final 2020-21 budget must help support a safe reopening of the state’s entire economy. Workers and businesses cannot earn income and pay taxes if our economy continues to be in an induced coma,” she said.
Assemblymember Weber said even though California is asking for federal aid, the state’s legislators still have the responsibility to find solutions that work for Californians, especially those hit hardest by the pandemic.
“Let’s be clear; we are not absolved of having a vision for the state. We must strive for a recovery, but we have to ask what that recovery will mean,” she said. “Before this crisis hit, we had communities underserved by the healthcare system, ignored by the education system, and robbed of economic opportunity. All of this is underscored by the disproportionate impact of COVID on these communities.”