Gov. Gavin Newsom submitted his 2019-20 “California for All” budget proposal to the Legislature, providing a fiscal blueprint that builds a strong financial foundation by investing an unprecedented $13.6 billion in budget resiliency and paying down unfunded pension liabilities.

“During my inaugural speech, I described the California Dream as a house we are building together,” Newsom said. “That wasn’t just a speech device – it’s exactly what we are proposing today. To make the California Dream available to all, our state must be fiscally sound. This budget lays a strong financial foundation for our state by eliminating debts, expanding the rainy-day fund and paying down our unfunded liabilities.”

Building the foundation for the California Dream

The budget allocates $13.6 billion to building budgetary resiliency and paying down the state’s unfunded pension liabilities. This includes $4 billion investment that eliminates all outstanding budgetary debt as well as deferrals, $4.8 billion to build reserves, bringing the state’s rainy day fund to more than $15 billion this year (the largest amount ever) and nearly $20 billion over four years, $4.8 billion to pay down unfunded retirement liabilities

Confronting the cost crisis

The budget creates a new “Working Families Tax Credit” by more than doubling the size of the state’s Earned Income Tax Credit to $1 billion, supporting low-income families with young children by providing a $500 credit for families covered by the credit with children under the age of six. The credit will also be expanded to reach full-time workers earning $15 per hour – reaching 400,000 additional families. This expanded credit will be funded as part of a tax conformity package.

Focus on early childhood

The budget includes funding for universal preschool for all income-eligible four-year-old children in the state, phased in over a three-year period. This funding will allow state preschool providers to offer full-day/full-year care to better accommodate working parents. The budget proposes the development of a plan to achieve universal preschool for all children in California, including new revenue options to support increased enrollment.  The budget includes $500 million one-time general fund to build child care infrastructure, including investing in the education of the child care workforce.

Largest K-12 education per-pupil expenditure in history

The funding guarantee for K-12 schools and community colleges in 2019-20 is $80.7 billion, a new all-time high with per-pupil expenditures now nearly $5,000 higher than just seven years ago.  The budget also funds critical work to build a longitudinal data system to better track student outcomes and increase the alignment of our educational system to the state’s workforce needs.

Free two years community college and long-term investments in higher education

The budget includes $1.4 billion ($942 million ongoing) for higher education to support increased enrollment, improved time to degree and a tuition freeze. Segments serving a higher number of students receive a greater amount of the increased resources. The budget proposes funding for two free years of community college tuition for first-time, full-time students.

For the full summary of the governor’s budget, visit ebudget.ca.gov.