Newsom Signs $202 Billion State Budget

Without any fanfare, California Gov. Gavin Newsom signed a $202.1 billion state budget Monday evening, a spending plan that closes a $54 billion COVID-19-related deficit in part by abandoning most of the progressive program initiatives he proposed in January budget.

“In the face of a global pandemic that has also caused a recession across the world and here in California, our state has passed a budget that is balanced, responsible and protects public safety and health, education, and services to Californians facing the greatest hardships,” Newsom said in a statement.

The plan calls for more than $11 billion in so-called "trigger cuts" that could be rescinded if the federal government provides more COVID 19-related financial assistance to the state by October 15. Those cuts include $6.6 billion in deferred spending on schools, $2.8 billion in cuts to state employee salaries and approximately $970 million in funding cuts for the University of California and the California State University systems.

During budget negotiations, legislative leaders pushed hard to shield many health and human service programs from deeper cuts this year. In a statement on the Assembly's approval of the budget last week, Speaker Anthony Rendon, D-Los Angeles, called it an important accomplishment.

"In the face of multiple hardships, including public health crisis and economic challenges, we have put together a plan that preserves the lifelines needed by many of our least fortunate Californians, including seniors and people with disabilities," Rendon said.

The agreement does draw down some of the state's budget reserves, including nearly $9 billion from the state's rainy day fund. Lawmakers have credited the creation of that account in 2014 and its healthy balance with helping California weather the economic hit the pandemic cause. However, they acknowledge the state could be dealing with deficits for years to come.