FILE – In this May 14, 2021, file photo California Gov. Gavin Newsom answers questions from reporters after delivering his revised budget proposal at a press conference in Sacramento, Calif. Newsom wants to take more than $12 billion from the state’s savings accounts and other sources to increase spending this year. That’s despite the state having about $100 billion in new money to spend. The independent Legislative Analyst’s Office criticized the proposal, calling it shortsighted and inadvisable.
SACRAMENTO, Calif. (AP) — Despite more than $100 billion of new money to spend this year, California Gov. Gavin Newsom still wants to take more than $12 billion from the state’s primary savings account and other sources to increase state spending, according to an independent review of the governor’s proposal released Monday.
California has so much money that it took Newsom a full week to explain how he wants to spend all of it, culminating in Friday’s budget announcement where he presented his plan, including 400 new spending proposals, to the state Legislature.
Newsom said his spending spree was made possible by $76 billion in new state money plus an additional $27 billion in federal coronavirus aid from Congress. He announced taxpayers would be getting $8.1 billion in rebates, plus the state would eventually let every 4-year-old go to kindergarten for free.
It was fortunate for Newsom, allowing him to announce a host of popular programs in a year he is likely to face a recall election. But a review of his proposal by the independent Legislative Analyst’s Office shows Newsom’s plan would still withdraw $8.3 billion from two of the state’s savings accounts, plus borrowing another $3.8 billion from other sources.
It’s the type of maneuvering policymakers usually don’t use unless the state is running out of money.
“Using tools designed for a budget crisis to support state spending at this time is shortsighted and inadvisable,” the LAO wrote in its initial comments on Newsom’s proposal. “The state will need these tools to respond to future challenges when federal assistance may not be as significant.”