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First Look: Governor’s Revised Budget Emphasizes Bold Proposals and Fiscal Resilience, Leaves Room for Other Investments

Publication date: 
Monday, May 13, 2019

Governor Newsom's May Revision to his proposed 2019-20 state budget continues to call for bold investments in creating economic security and opportunities for Californians, while also fostering the state’s fiscal health. The Governor forecasts revenues that are $3.2 billion higher (over a three-year “budget window” from 2017-18 to 2019-20) than projected in January, driven largely by continued economic growth. The Governor’s proposal includes a mix of one-time and ongoing investments vital to low- and middle-income California’s economic prosperity, including: a significant expansion of the state’s Earned Income Tax Credit (EITC), investment in early childhood development, extending paid family leave, continuing to expand health coverage, increasing investment in K-12 and state higher education systems, and working toward greater access to mental health services. The Governor’s revised budget also provides additional support for housing and homelessness supports, recognizing that the high cost of housing continues to burden and destabilize many Californians. These proposals, individually and in combination, would significantly improve the health and well-being of millions of Californians, most notably low- and middle-income people of color, immigrants, and women and children. The May Revision also continues to bolster the state’s fiscal resilience by building up reserves and paying down state debts and liabilities. While the Governor’s revised budget continues to call for a variety of program expansions, the May Revision sunsets some of those investments within a few years. These proposals represent a mostly balanced approach to managing the state’s fiscal health, but there are opportunities to further enhance the state’s fiscal health and extend support to more Californians in need.

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