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Newsom outlines new budget proposal amid coronavirus crisis

(Content provided by The Sacramento Bee)

BY DAVID LIGHTMAN AND SOPHIA BOLLAG

JUNE 08, 2020 05:00 AM

California Governor Gavin Newsom announced his new budget proposal on May 14, 2020 amid the coronavirus pandemic. The proposal includes heavy use of reserves and federal funding but also cuts to education, health care and other services.

Washington has no plans to vote on more federal aid to the states before California’s June 15 deadline to pass a state budget — a budget that Democratic lawmakers say badly needs help for schools, health care, police and just for keeping thousands of people working.

Instead, what Sacramento and other state capitals see on Capitol Hill is a stalemate without an obvious end. Or even a clear path forward.

That means big trouble, or at the least a lot of drawn-out tension, for California and its lawmakers.

Gov. Gavin Newsom is calling on the federal government to send the state more money, and has laid out a budget plan with $14 billion in so-called trigger cuts. The economic downturn brought on by the coronavirus created an estimated $54.3 billion deficit for the next year.

Without federal aid, a long list of state programs face reductions that will be felt everywhere. The state fiscal year begins July 1, and if Congress fails to act before that — and right now, that’s not a good bet — the California cuts would be triggered.

Education funding would be cut. So would dental benefits for low-income people. State preschool programs would have fewer slots for children than planned and less funding per child.

Less money would go to child care programs. The University of California and California State University systems would lose about 10 percent of state funding.

A counter-proposal from the Legislature would make fewer cuts, but its plan still relies heavily on federal funding.

In Washington, the House, Senate and President Donald Trump need to agree on a package before anything can become law. Though there are some talks there’s little evidence of progress towards an agreement.

The House, which last month approved a $1 trillion state and local government aid package, has scheduled no votes until June 30.

In the Senate, Majority Leader Mitch McConnell has urged a pause in stimulus legislation, and last week outlined a June schedule that does not include any such package. The Senate plans to spend the month considering nominations and major defense as well as land and conservation bills.

Conservative, liberal and moderate economic and policy experts are largely unified in their plea for more help as most states face sudden, huge deficits that by law have to be addressed.

“State and local governments desperately need financial support,” said Mark Zandi, chief economist at Moody’s Analytics.

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