California's 2021-22 Governor's Budget Overview
California's 2021-22 Governor's Budget, presented by Erika Li, Chief Deputy of the Department of Finance, outlines the state's improved economic outlook with revenues increased by $29 billion from the previous year. The budget includes total expenditures of $227 billion, a surplus of $15 billion, and projections of future shortfalls. Despite positive revenue trends, challenges such as ongoing unemployment and potential economic downturns are addressed through budgetary resiliency measures and immediate responses to the COVID-19 pandemic. The budget focuses on job creation, relief for individuals and businesses, and emergency COVID-19 response efforts.
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Presentation Transcript
2021-22 Governors Budget January 2021 Erika Li Chief Deputy, Department of Finance
Californias Economic Outlook Revenues have dramatically improved $158B (up $29B from 2020 Budget Act) 8.2% unemployment rate, down from 16.4% However, 4M Californians still receiving UI benefits Less than half of jobs lost since Feb recovered 2021-22 Governor s Budget 2
Budget Structure Total expenditures $227B ($165B General Fund) One-time surplus $15B Building budgetary resiliency Total reserves $22B Additional state retirement liabilities paid $3B (about $6.5B over the next 3 years) Scheduled program suspensions delayed $2B Out-year operating deficits 2021-22 Governor s Budget 3
Budget Projects Surplus, But Future Shortfalls Projected $25 $20 $15 $10 Dollars in Billions $5 $0 -$5 -$10 -$15 -$20 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2021-22 Governor s Budget 4
Recessions Impacts Improved revenue picture attributable to: Less severe economic downturn than expected Unequal spread of wage losses Strong stock market performance Disproportionate impacts on low-income individuals/families Budget supports direct COVID-19 response costs, immediate relief for individuals and businesses, and job creation to expedite recovery 2021-22 Governor s Budget 5
COVID-19 Direct Response Cost Estimates Budget prioritizes emergency response (over $4B) Vaccines Testing Contact tracing Food banks Community engagement State operations corrections and rehabilitations 2021-22 Governor s Budget 6
Immediate Budget Action Safely Reopen Schools and Immediately Provide Relief to Individuals and Small Businesses Safely Reopen Schools ($2B) Prioritize in-person instruction Golden State Stimulus ($2.4B) One-time $600 tax refund to low-income households Small Business Grants ($575M) Fee Waivers ($70M) $2.6B federal relief funds and eviction moratorium extension 2021-22 Governor s Budget 7
Budget Prioritizes Job Creation to Expedite Recovery California Jobs Initiative [$778M total/of which $388M is being requested for Early Action (EA)] CalCompetes credits and grants ($430M) Small business tax credits, grants/micro-grants, loans ($247.5M) Alternative energy sales tax exclusion ($100M) Infill infrastructure grants ($500M/$250M EA) projects leading to long-term housing development. 2021-22 Governor s Budget 8
More Job Creation Zero-emission vehicles package ($1.5B/$239M EA) $1B securitization of future vehicle registration fees for construction of charging stations $465M for incentives to improve access to ZEV Wildfire and forest resiliency package ($1B/$323M EA) for projects that mitigate wildfire risks Forest management Secure fuel breaks Home hardening 2021-22 Governor s Budget 9
Workforce Development Improving linkages between higher education institutions and employers ($250M) Higher Education ($78M) Apprenticeship and work-based learning opportunities High Roads Training Programs ($25M EA) Construction, Forestry and Agriculture, Healthcare Trade and Logistics, IT Resulting in 2,200 jobs 2021-22 Governor s Budget 10
EducationProposition 98 Proposition 98 funding ($85.8B) highest level ever Cost of living adjustment ($2B) fully funds LCFF target levels Majority of K-12 deferrals paid ($9.2B) of $12.9B Additional non-Proposition 98 General Fund investments ($3.4B) Supplemental payment $2.3B Retirement contribution rate buy down $1.1B 2021-22 Governor s Budget 11
Extended Learning Time $4.6B to address pandemic s impacts on student learning Targeted interventions such as community learning hubs, summer school programs, and before and after school wrap around services Request early action to allow time for districts to plan for these interventions 2021-22 Governor s Budget 12
Higher Education California Community Colleges ($111M cost of living adj) Emergency financial aid ($250M) Basic needs support ($100M) CSU and UC (3% base increase) CSU:$200M ongoing/$225 one-time UC: $136M ongoing/$225M one-time Both segments must maintain resident undergrad tuition/fees at current levels and reduce equity gaps Financial Aid ($35M) 9,000 additional Competitive Cal Grants 2021-22 Governor s Budget 13
Homelessness $1.75B in grants to local jurisdictions to acquire housing $750M/$250M EA housing for people experiencing homelessness (Homekey) $750M housing to expand community continuum of care treatment resources for those with acute behavioral health needs $250M housing for vulnerable seniors, such as Adult Residential Care Facilities/Residential Care Facilities for the Elderly 2021-22 Governor s Budget 14
Health Continue to support health care affordability Office of Healthcare Affordability Student mental health ($450M) CalAIM ($1.1B) transform delivery system to better connect Medi-Cal beneficiaries to services they need Incompetent to Stand Trial (IST) ($233M) streamline services to felony ISTs at local level to drive improved outcomes for those with serious mental illness 2021-22 Governor s Budget 15
Climate and Environmental Protection Cap and Trade Plan ($1.4B/$624M EA) advance state s priorities on environmental justice, clean air, and water Toxic Sites Clean Up ($331M) accelerate clean up of contaminated properties in impacted communities using health-based criteria Integrated Pest Management ($38M) facilitate transition away from harmful pesticides Replaces flat-fee mill assessment on pesticides sales with tiered assessment based on toxicity 2021-22 Governor s Budget 16
