Posted Jan. 10, 2020; Updated Jan. 17, 2020
Gov. Gavin Newsom unveiled his proposed 2020-21 State Budget last week in Sacramento, which includes $153.083 billion in General Fund, $64.758 billion in special funds, and $5.352 billion in selected bond funds totaling $222.193 billion.
This proposed budget reflects a 3.5 percent increase in spending from the current fiscal year budget.
The Governor’s proposed 2020-21 budget continues the state’s focus on building up discretionary reserves and spending nearly $2 billion of the $5.6 billion dollar surplus on one-time spending, including supplemental payments to CalPERS for state unfunded liabilities. However, the budget continues to grow state government through new responsibilities, redesigned state departments, and increased safety net spending above the Legislative Analyst Office’s recommendation of no more than $1 billion.
The Governor’s budget proposal appropriately acknowledges growing national and global economic risks from a recession on the horizon, global stock market volatility, and political instability. Nonetheless, California continues to experience modest economic growth in the face of measurably slower gross domestic product growth across the nation that projects downwards through 2023.
To prepare for potential recession scenarios in the coming years that could result in a larger than $40 billion budget deficit, the Governor’s budget proposal builds up state reserves to $21 billion overall ($18 billion Rainy Day Fund) and primarily focuses the remainder of the budget surplus of $5.6 billion on one-time spending.
The League has been reviewing the 243-page (before the appendices) budget document for the past week and has the following analysis of sections in the budget that are most important to cities.