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Reaction to Governor’s Budget Proposal Largely Positive

January 12, 2019

State Superintendent of Public Instruction Tony Thurmond

State Superintendent of Public Instruction Tony Thurmond praised Governor Gavin Newsom’s proposed budget for fiscal year 2019-20.

“Governor Newsom hit a home run in his first budget in education and across the board. The budget is thoughtful and balanced and makes good use of public funds, but it is appropriately aggressive in its focus on helping Californians who need it most,” he said.



Governor Newsom proposed increasing K-12 education by $2.3 billion, investing $1.8 billion in early education, and providing $3.7 billion to help all districts deal with rising pension costs, which are stressing budgets of districts throughout the state. The pension aspect of his budget includes a proposed a one-time $3 billion contribution to CalSTRS and $700 million in each of fiscal year 2019-20 and 2020-21 to reduce the rates districts are charged for their employees’ pensions.

“I am pleased that Governor Newsom is placing a top priority on education and look forward to a strong, productive partnership with him, the Legislature, and all stakeholders in the next few years that will lift up all of our students by improving our education system and increasing the resources that go to our schools,” he said.

Thurmond also praised the proposed $1.8 billion in early learning and childhood programs, which could help close the achievement gap.

“All children need to enter grade school ready and prepared to learn, but some children, especially those from low-income communities, do not have access to high quality early learning programs, creating a “readiness gap.” This investment would help reduce that gap.

Studies show that investments in quality early education and child care programs pay off with dramatic savings. Every dollar invested in quality pre-kindergarten programs saves more than $7 because students in these programs are more likely to finish high school, obtain jobs, and avoid the criminal justice system.”

Thurmond also said he was pleased the Governor’s budget recognizes the need to invest in training, the early learning and care workforce, and the facilities that house those classes and services.

California Teachers Association

California Teachers Association President Eric C. Heins said, “This is an exciting time for California as we celebrate the inauguration of Gov. Gavin Newsom and SPI Tony Thurmond.  We are ready to work with Gov. Newsom on his bold vision of supporting children from cradle to career, investing in schools and colleges, creating sustainable jobs, and providing affordable health care and housing to all Californians in every community. His energy and commitment, coupled with the resolve and dedication of California’s 325,000 educators, will lead us to a bright future for California’s students.

“Congratulations to our friend and colleague Tony Thurmond on becoming California’s first Afro Latino and second African American to hold the position of Superintendent of Public Instruction. Tony is the champion for public education and as the SPI will work closely with educators to ensure students have the public education they need and deserve including addressing the critical teacher shortage, making college and career pathways accessible to all students and helping English learners succeed in school. As a long-standing advocate for public education, we are confident that, under his leadership, education will continue to improve for all students regardless of ZIP code.

“We are eternally grateful for Governor Brown for keeping his promise to California’s students and for leaving California a better place. He got us through the recession and after we endured hard-hitting cuts to school funding that led to more than 30,000 teacher layoffs and decimated key student programs, he championed legislation that directed funds at low income and other high needs children and shifted decision-making about programs students need to their local communities. Today, California is the fifth largest economy in the world with a substantial surplus and ready to meet the challenges that lie ahead. For this and for all you have done for our students and for our state, we honor and thank you!”

California Business Roundtable

California Business Roundtable president Rob Lapsley said, “We appreciate Governor Newsom’s vision and hard work in presenting his first budget that builds a three-year framework for his spending priorities. From an initial review, we support his many of his one-time investments such as the expanded Earned Income Tax Credit (EITC), K-12 and higher education, paying down retiree pension and health care debt, and housing reforms.

“However, as we assess his three-year framework, we will be focused on the details of these proposals. Our first priority is to analyze the impact of increased permanent spending commitments that could lead to increased revenue pressures in the future, which would likely lead to increase costs for Californians who are already some of the most heavily cost-burdened in the country.

“Our second priority is to support innovative reforms that would be a critical companion to increased spending. Additional revenues by themselves will not change the outcomes that are desperately needed for upward mobility, communities of color and our future blue-collar and white-collar workforce. 

“We look forward to discussions with the governor and the new administration in how the business community can support their key budget proposals while also ensuring support for reforms that deliver real results for all Californians.”

California Budget and Policy Center

The California Budget & Policy Center, a nonpartisan public policy research group, issued the following statement from Executive Director Chris Hoene in response to this morning’s release of Governor Gavin Newsom’s proposed 2019-20 budget:

“Governor Newsom’s inaugural budget proposal calls for a series of bold and smart investments in broadening economic security and opportunity for Californians, while continuing to strengthen the state’s underlying fiscal health.”

“The Governor’s proposal includes a range of significant expansions in support of low- and middle-income Californians who are struggling to make ends meet and access greater opportunity, including doubling the state’s Earned Income Tax Credit, working toward universal preschool for 4-year-olds, investing in child care infrastructure, expanding health care to move closer to universal coverage, extending paid family leave, boosting CalWORKs grants, and increasing investment in state higher education systems. Recognizing that high housing costs contribute to California’s high poverty rate, Governor Newsom also proposes a mix of policies to address housing needs and homelessness. These policies would make California more affordable for millions of Californians.”

“Many of the Governor’s proposals - such as for child care and housing - use one-time investments in 2019-20 to lay a foundation for plans to build out public supports over the next several years.”

“Recognizing that California is experiencing a period of sustained economic growth and a positive revenue outlook, the budget proposal also calls for paying down debts and building up reserves. These proposals, in combination with one-time and ongoing investments, represent a balanced approach to managing the state’s fiscal health.”

“We are encouraged by the Governor’s proposals and the focus on making smart budget and policy choices that will improve outcomes for many Californians, especially those who are not yet sharing in our state’s economic prosperity.”

State Sen John Moorlach, Orange County Republican on Senate Budget and Fiscal Review Committee

State Sen John Moorlach (R-Costa Mesa) said, “As the only trained CPA in the California Legislature, I am looking forward to working with Gov. Gavin Newsom on his state budget proposal for fiscal year 2019-20. I hope it represents a fresh start for all 40 million Californians and their aspirations. As I do a quick top-line review, here are eight recommendations and concerns:

  1. Commendably, the governor makes not that the economy is slowing, so spending must be restrained. I would add that the yield curve is inverted, which usually means an economic slowdown is imminent. Consequently, a total budget growth of 3.2 percent may be an optimistic assumption
  2. He spends $7.7 billion, “across multiple departments and programs, on programs to address the state’s homeless and mental illness crises.
  3. He includes $213.6 million for wildfire mitigation and hardening our electrical infrastructure. Almost all that is from SB 901, passed last year, which requires $200 million a year for five years from cap-and-trade funds for such programs. I think the amount should be higher, but that’s a start. Given how greenhouse gases from three days of wildfires equal the entire amount of greenhouse gasses from all the automobiles in the state for a year, the cost-benefit advantage here is substantial.
  4. It’s excellent the governor is continuing to fill the Rainy Day Fund at $15 billion, slightly more than the 10 percent of the general-fund budget as required by Proposition 2 from 2014. The budget proposal anticipates that will rise to $19.4 billion in the 2022-23 budget. An economic downturn may be just around the corner. Gov. Gray Davis found out quickly how hard it is to keep money in the bank as he blew through the $13 billion surplus Gov. Wilson left him.
  5. The governor wants to put a one-time payment of $3 billion into CalPERS and $2.9 billion into CalSTRS over the next four years to reduce state pension and retiree medical liabilities. That’s a great start, but hardly adequate to address the growing pension and retiree healthcare costs that state and local government are now required to acknowledge in their Comprehensive Annual Financial Reports.
  6. On the negative side, the governor missed an opportunity to put money into the Public School System Stabilization Account, also required by Proposition 2. According to the Legislative Analyst’s Office, there is currently no money in the account. My own analysis of school district balance sheets tallies more than two thirds of school districts running red ink. Many districts, the worst being the Los Angeles Unified School District at $19.6 billion, run deep into the red.
  7. The governor is acting more like a Chief Executive Office than his predecessor. Instead of giving the Department of Motor Vehicles whatever it takes to shorten the waiting lines, Gov. Newsom is sending in a strike team and implementing better management practices. This is very encouraging.
  8. Finally, I hope my slowing-economy concerns are addressed in the May Revision of the budget proposal. By then we will better see if the recent downturn in the stock market, especially the sharp decline of Silicon Valley companies, was an anomaly or part of a trend.

Sources: compiled from press statements by EdBrief staff



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