Sacramento, Calif. (Associated Press) – California Governor Gavin Newsom pledged Friday to use the state’s record $300 billion budget, including an unprecedented surplus of nearly $100 billion, to “future case proof” from the effects of the volatile midterm elections. which feared would undermine access to abortion, gun safety and privacy protections across the country.
The governor of the nation’s first most populous state — and a potential Democratic presidential candidate — used his budget presentation Friday to shore up his progressive credentials while attacking rivals in conservative states.
He announced significant increases in spending on health care, education, child care, and the environment while also pledging to spend $125 million to facilitate abortions for women in California, including women from other states.
As the US Supreme Court prepares to overturn Roe v. Wade next month, Newsom pointed to a sign showing California’s lower death rate from COVID-19 compared to the Republican-led states of Florida, Texas and Arizona, all of which are expected to continue. Restrict or criminalize abortions if the court overturns the RO.
Newsom established the state’s first coronavirus stay-at-home order, and many credit his aggressive actions throughout the pandemic with saving lives. Critics say he exaggerated and exaggerated the economic damage.
“If you’re pro-life, how the hell is that possible?” Newsom said of the high death rates in the three states that have used a laissez-faire approach during the pandemic. “Excuse me of their mantra of being pro-life. They don’t deserve this status.”
The sign on Newsom’s presentation indicated how California compares to “the most populous states.” Texas is No. 2, followed by Florida. But Arizona ranks 14th. The fourth state, led by Democrats, is a strong supporter of abortion rights in New York, where the COVID death rate is higher than Texas and comparable to Florida.
Brian Griffin, deputy press secretary to Florida Governor Ron DeSantis, questioned Newsom’s assertion, arguing that in an “appropriately modified format” Florida has had great success as well as California with COVID “but still did not preserve the personal liberties of its citizens and did not destroy a series of Small businesses are in the process.”
California’s projected budget surplus of $97.5 billion is different from any we’ve seen before at the state level and is fueled by higher tax revenue. It’s larger than nearly every other state’s full operating budgets.
The constant flow of tax money has prompted California Republicans – who do not have enough numbers in the state legislature to have much influence – to complain about high taxes that reduce quality of life.
“He has not proposed any permanent tax relief to deal with the worsening affordability crisis that has been exacerbated by his policies,” said Republican Vince Fong, deputy chair of the assembly’s budget committee. “The governor may not want to admit it, but California is in crisis and its budget is unsustainable.”
The rise in revenue is “a sign of how well a number of people are doing in this economy” and a reflection of “the concentration of wealth and success in the hands of a few,” Newsom said.
Nearly half of California’s income tax collectors come from the top 1% of income earners, who have done well during the pandemic. This system makes the state more vulnerable than others to booms and collapses of the economy.
Capital gains – the increase in the value of assets such as stocks and other investments where most wealthy people derive their wealth – account for 9.7% of personal income in California. This is the second highest rate ever recorded, after the year 2000 which was just before the dotcom bubble burst and entered the recession.
That could be a sign that the economy is about to slow again, Newsom’s administration said, also citing uncertainties stemming from the war in Ukraine, supply chain issues and recent actions by the Federal Reserve to combat hyperinflation. It expects capital gains revenue to fall 22% next year.
Newsom’s proposal would leave the state $37.1 billion in reserves while using nearly all of its surplus for things that are not a recurring expense. One of his biggest proposals is to return $18.1 billion to taxpayers in the form of tax credits and programs that provide rent assistance, utility bills and health insurance premiums.
With gas prices hitting a record high in March, Newsom proposed suspending the state tax on diesel fuel, offering rebates of up to $800 to everyone with vehicles registered in the state and spending $750 million to give everyone free rides on public transportation for three months.
But that proposal won nowhere in the state legislature, as Democratic leaders favor a narrower relief package that would target only low-to-middle-income families.
Newsom insisted that the two sides would reach an agreement on inspection procedures later this year. Republicans argue that the state should instead temporarily suspend the gas tax, which at 51.1 cents a gallon is the highest in the country.
“The governor is in election-year fantasy if he thinks the promises of discount cards and fall discounts will now provide relief,” said Senate Republican leader Scott Welk.
Newsom’s budget presentation comes as the state is in the throes of a deep drought and state energy officials have warned of a potential power shortage during the summer when air conditioning is at its peak.
The governor called on people to cut their water use by 15%, but consumption rose dramatically in March. Newsom wants to spend more money to encourage conservation, provide loans to distressed drinking water systems and promote water recycling. It includes $75 million in grants to drought-affected farms and businesses.
Meanwhile, he called for $5 billion to be set aside to create a 5,000 megawatt “strategic reserve” of power to help the country avoid blackouts. One megawatt can power 750 to 1,000 homes.
Newsom’s budget document included limited details about how that reserve would be built, but he indicated he is open to the possibility of keeping the Diablo Canyon nuclear facility online after a planned shutdown in 2025, as well as some gas-fired power plants that are set for retirement.
The budget plan must be approved by the legislature and enter into force on July 1.