Gov. Gavin Newsom submitted his 2019-20 "California for All" budget proposal to the state Legislature Thursday.
He is projecting a $21.4 billion surplus, the largest since at least 2000.
That's about $6 billion more than the non-partisan legislative analyst predicted in November.
“During my inaugural speech, I described the California Dream as a house we are building together,” Governor Newsom said in a press release. “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."
The budget allocates $13.6 billion to building budgetary resiliency and paying down the state's unfunded pension liabilities, according to a press release. This includes a $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 and nearly $20 billion over four years; and $4.8 billion to pay down unfunded retirement liabilities.
Newsom says most of the money comes from his projected smaller increase in spending on Medi-Cal, the state's health care program for low-income residents. He also says tax revenues are better than what was projected under the prior budget.
Republican Assemblyman Vince Fong of Bakersfield said the budget spends public dollars "at a record-setting level."
“Californians across our state understand that we must live within our means yet the Governor’s proposed budget continues to spend public dollars at a record-setting level — $8 billion more than last year’s budget," he said in a press release. "As we review the details of this budget proposal, we need to significantly expand our budget reserves, pay off our liability and debt, and provide any remaining dollars for infrastructure investment. And as stewards of hard earned tax dollars, we must stop any budget diversions and gimmicks that has plagued previous budgets."
Newsom's rosier surplus gives him more money to pay down pensions and invest in higher education and housing.
Newsom will work with the Legislature over the next six months to finalize the budget. Surpluses often change between the governor's January budget presentation and the final budget due in June.