2022 Budget Perspective
Every January, the governor is required by the California Constitution to release his budget proposal for the upcoming fiscal year. It’s his chance to lay out priorities for spending across a multitude of programs and services that Californians depend upon. In lean years, it can be a grim document full of painful cuts to services like we saw during the Great Recession. When revenues are up, as they have been for the past several cycles, it’s often full of bold and progressive ideas. It also serves as the starting point for the California Legislature as we begin our work to craft a balanced budget over the next six months.
A good budget is a sustainable budget. It should accurately account for our liabilities, bolster our reserves, provide meaningful support to our core government functions, and fund solutions to the problems and crises facing our state. When Governor Gavin Newsom released his budget proposal last week, I was happy to see plenty of areas where we have common ground and goals.
For over a decade, California has been building budget reserves to guard against the boom and bust cycles that have wreaked havoc upon our economy and vital services. In this year’s budget proposal, Gov. Newsom is proposing to boost our budget reserves to $34.6 billion and reduce our debt and liabilities. It might not be the most exciting part of any spending plan, but it’s the right thing to do to ensure our fiscal health over the long run.
On the spending side, the governor’s proposed budget includes historic investments in schools, transportation, health care and housing. It calls for quick action to fund $1.4 billion in pandemic response efforts, including increased testing capacity and resources for hospitals.
Under the proposal, schools would benefit from $119 billion in funding for transitional kindergarten through 12th grade. That breaks down to $20,855 per student. That’s the highest level of funding ever, and part of a robust plan to provide ongoing funding for core programs including special education, nutrition and expanded learning. Combined with the investment in early childhood education and childcare, career technical education, community colleges and our universities, it’s a budget package that takes into account learning across the spectrum.
We’ve spent a lot of time and billions of dollars focused on the housing crisis, and for good reason. It’s one of the biggest and most daunting challenges facing California. The 2021 budget alone included over $10 billion in funding to increase housing production and assist local governments. It also included over $12 billion to address homelessness. Even with the influx of funding, progress has been cumbersome and understandably frustrating for cities and neighborhoods alike.
In the proposal for 2022, the focus is on meeting immediate housing needs and linking housing with behavioral health and treatment. The plan also includes funding to help reduce the number of Californians living in encampments with resources for local communities to assist in the transition to safe housing and cleanup.
Of course, you can’t talk about housing without considering transportation needs. As the chair of the Assembly Transportation Committee, I’m looking forward to continuing our negotiations with the Administration on transportation funding. With the passage of the federal infrastructure package, California is expected to see more than $10 billion in new federal funding over the next five years. At the state level, I’m pleased to see the governor increase the proposed investment in transit and active transportation. We’ve made some significant gains in funding that can ease congestion and pollution and we have a real opportunity to focus on building sustainable transportation options that can better connect communities.
In any discussion about funding priorities, we can’t overlook small businesses that have long been the backbone of our economy. In fact, small businesses have been responsible for creating two-thirds of new jobs in our pandemic recovery. I’m happy to see the governor’s proposal restore business tax credits and build on our 2021 work to support small businesses with $500 million in additional tax relief.
Finally, in the Crescenta Valley and across the 43rd District, we’re all too familiar with the devastation that wildfires can bring. That’s why I’ve advocated for investments in proven prevention strategies, home-hardening and new equipment for firefighters throughout my time in public office. Last year, we invested a record $1.5 billion to fund prevention efforts. This year, Gov. Newsom is proposing an additional $1.2 billion to fund fire prevention and forest health projects.
That’s just a few of the highlights from the governor’s proposal. So, where do we go from here? Over the next six months, both the assembly and senate will hold hearings through their budget committees on the details of the spending plan. Once we have the updated revenue projections in May, the hearings will kick into high gear as we push towards a budget agreement between the legislature and the governor in June. The legislature has a constitutional deadline to pass the budget by June 15.
What are your budget priorities? How would you allocate a budget surplus? As always, I’d like to hear your thoughts on our budget, legislation or any general comments or concerns. You can reach my District Office at (818) 558-3043, or by email at Assemblymember.Friedman@Assembly.ca.gov.