Orange County Register: The good, the bad and the ugly of Gov. Newsom's budget proposal

By Patricia Bates
Sunday, January 20, 2019

Published by the Orange County Register

Gov. Gavin Newsom released his 2019-20 budget earlier this month that, at first glance, has something for everyone to love and dislike. His budget can be classified into three parts — the good, the bad, and the ugly.

The Good

There is a lot to applaud in the budget that reflects Republican values. These include expanded efforts to pay off past debt and tackle some of the unfunded pension liabilities for retired state employees. The proposal also increases the Earned Income Tax Credit for working Californians.

I am pleased that the governor wants to boost the state’s rainy day fund. Republicans fought hard to establish the fund that the voters approved in 2014 and building it to help weather the next economic downturn is fiscally responsible.

The budget would also fulfill the will of the voters by boosting school infrastructure and increasing reimbursements rates for medical providers that will result in greater access to health care for California citizens.

For example, in 2016 voters were told that Proposition 51 would provide bond money to modernize existing schools and build new facilities. I endorsed Prop. 51 to help improve our schools, and the voters approved it. Unfortunately, former Gov. Brown only authorized the sale of less than 7 percent of the construction bonds. New developments with requirements to provide new schools are feeling the pressure from the lack of investment. This increases costs, shortchanges our children, and violates the will of the voters. Districts throughout the state need the modernization funds.

I am encouraged that Newsom seems committed to invest in our schools.

The Bad

The budget would spend a record-high $209 billion, an increase of $8 billion over last year. I remain concerned with massive unfunded pension liabilities and also the new proposals to expand services and obligations that the state will not be able to afford when the economy slows down. Creating new spending commitments today will lead to either painful cuts or more tax increases, or both, in the future.  In just one month since the start of the new legislative session, Democratic state legislators have already proposed $40 billion in new spending, much of which would be above and beyond what the governor has proposed. Hopefully the final budget will reflect more caution.

The Ugly

Finally, I believe that transportation dollars should be spent on transportation needs. The governor’s idea to withhold funds for road repairs to communities that do not meet housing goals is a bait-and-switch on the commitments made regarding the recently-hiked gas tax.

When the gas and car tax increases were debated in the last legislative session, supporters did not say anything about linking road repair funding to housing. With the defeat of last November’s gas tax repeal, Sacramento politicians now want to hold road repair dollars hostage. To make housing more affordable requires getting rid of programs and regulations that we do not need and streamlining others so they actually help people and serve their intended purpose. This includes treating California’s housing crisis as we do building new professional sports arenas and stadiums — cutting red tape to reduce costs and delays.

The governor’s proposal is merely the opening chapter in a long budget process. There will be plenty of changes to the final 2019-20 budget that must be passed by June 15. So stay tuned. You can read the governor’s budget proposal at www.ebudget.ca.gov.