Newsom Zeroes in on Education Gaps, Homelessness and Climate Change in State Budget

Gov. Gavin Newsom unveils his $222 billion state budget in a presentation at the Capitol on Jan. 10, 2019. (Scott Shafer/KQED)

Updated Friday at 12:46 p.m.

Gov. Gavin Newsom unveiled a $222 billion state budget this morning, saying it attempts to confront two of California's persistent problems: risks caused by climate change and homelessness.

The governor said the budget proposal, his second, also seeks to tackle long-standing problems in the state's education system, including the teacher shortage and pervasive achievement gap between black California students and others.

Newsom also wants to expand access to healthcare for undocumented seniors in California, lower prescription drug costs by creating a generic state drug label; and see state policy recognize the link between stable housing and mental and physical health.

"We believe in universal health care, we believe universal health care lowers costs," he said. "We believe its the right thing to do morally and ethically, and the financially responsible thing to do."

And he's proposing a new tax on nicotine vaping products that he estimated could raise up to $32 million next fiscal year — money he said will be used to prevent youth vaping, and other enforcement programs.

In a Capitol presentation Friday morning, Newsom stressed both California's current economic strength but also the likelihood of a downturn in the future, saying that his administration has built on the work of his predecessor to both increase state reserves — now at $18 billion — and pay down state debt.

"There is a derangement symptom going on in the popular media, that our best days are behind us and that California is not hitting on many cylinders," he said, before rattling off a list of the state's economic strengths.

"One out every seven jobs created in America since the bottom of the recession came from the great state of California," Newsom said.

But the governor acknowledged that the state still has a lot of work to do to address homelessness, inequality and other challenges.

“Despite the progress we’ve made, there are deep, structural challenges that threaten our state’s future and demand our urgent attention. These problems — our widespread affordability crisis, expanding homelessness crisis and catastrophic wildfires — have been decades in the making and won’t be fixed overnight," he said.

The proposal laid out Friday kicks off budget season in California; lawmakers have the next six months to debate and refine Newsom's proposal and must pass a final budget by mid-June.

Education

Newsom said it's "self-evident" that the state should focus resources on the 23 high-poverty school districts where African American students are disproportionately clustered.

The governor is proposing $900 million to help train and support teachers in the state's high-poverty schools; and $250 million to help reform the special education system. He also wants lawmakers to appropriate $300 million for one-time  grants and technical assistance to create improvement plans at California's lowest-performing schools and another $300 million for one-time grants to help support kids' mental health.

The budget also proposes the creation of a Department of Early Childhood Development to create a more "unified, quality affordable child system." The budget would fund 10,000 new preschool spots as part of the state's goal to eventually provide preschool to all low-income four-year-olds.

"If you wanna support children, you have to support caregivers. If you wanna support parents you have to support children," he said.

And the governor announced that his wife, Jennifer Siebel Newsom, has been working with his administration on a $70 million expansion of the state's school nutrition program.

Housing and Homelessness

Newsom called homelessness the issue that "defines our time" and said the state will invest more than $1 billion to help cities and counties tackle the crisis.

Earlier in the week Newsom released part of his proposal on homelessness and housing, calling for $1.4 billion in spending on a wide range of programs and signing an executive order aimed at getting people on the streets into shelter immediately. He's directing state agencies to make land available immediately to local governments and nonprofits to shelter homeless Californians — as long as the use of the land doesn't delay affordable housing development.

Also included in that proposal is a new fund, managed by the Department of Social Services, that will give direct support to both individuals facing homelessness, in the form of rental assistance; as well as help local governments develop housing and provide funding for board and care homes. Newsom said this $750 million plan is unique because the money will go directly to service providers.

The governor is also calling for the state to more closely acknowledge the connection between healthcare and homelessness. He's proposing $695 million within the Medi-Cal budget for housing and supportive services for the chronically homeless, with the idea that such programs can keep people out of the emergency rooms or expensive health care clinics.

He noted that not one dollar of the $1.75 billion included in this year's budget to increase housing production has been sent out to local governments yet, but said that money is starting to flow.

Climate Change

Newsom is proposing a $4.75 billion "climate resilience bond" for the November ballot aimed at funding projects that will reduce climate risks.

He also wants to create a $1 billion revolving loan fund would help "level the playing field" for smaller actors and seed innovative projects that private companies may be wary of investing in. He cited recycling, transportation and agriculture projects as areas that that fund could help kickstart.

Newsom is also proposing hundreds of millions of dollars to prevent and fight fires, including investments in new technology, more firefighters, home hardening and vegetation management.

On PG&E, California's largest and only bankrupt utility, Newsom  continued to leave open the possibility of state intervention  —including a public takeover. His budget introduction notes that the goal is for the utility to emerge from bankruptcy by this summer.

"The budget reflects necessary support for the administration's efforts to achieve the required transformation of PG&E within the bankruptcy process," the budget states. "However, if protecting Californians' interests and ensuring the necessary transformation requires further intervention, including a state takeover of the utility, the administration will work with the Legislature."

Newsom said that if a takeover is necessary, it would be structured to protect the state's general fund.

Criminal Justice

Newsom's budget forecasts an end to private prison contracting by April, and says that if population trends hold, the state could close a prison within five years.

"I wanna close a state prison, and I wanna do it on my watch," he said, adding that he hopes his watch extends to another term. 

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Newsom said depending on prison population numbers he thinks the state could shutter a prison by 2022 at the earliest and 2024 at the latest.

"And we have a strategy and a plan to shut down a prison and that's enlivening," he said. 

Newsom said he also wants to "transform" prision life, noting that the budget calls for investments in rehabilitation programs in state prisons; technology for inmates who are going to school; and more training of correctional officers and counselors so they can help support the expansion of programs that will help inmates.

Newsom also wants to reform the probation system, capping probation supervision at two years but also allowing probation for some misdemeanor convictions. He said the proposal, which would lower probation terms by a year, is based on data showing that the supervision is most effective if people get a lot of help at the beginning of their probation term. But he warned that the shortening of probation "will be controversial."

Additionally, he is proposing a $11.5 million investment to expand a program that lets low-income individuals apply online to reduce fees and fines they cannot pay.

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