California Leaders Agree on Budget Counting on Washington Rescue
California Leaders Agree on Budget Counting on Washington Rescue
(Bloomberg) -- The budget agreement struck between California Governor Gavin Newsom and lawmakers counts on the federal government to provide additional funds to fill a yawning coronavirus deficit, a compromise from his plan to slash spending first and fill in those cuts only after Washington comes to the rescue, according to a person familiar with the deal.
Lawmakers last week passed a placeholder spending plan that eschewed Newsom’s initial approach. Their $143 billion general-fund budget depends on $14 billion in additional federal aid and only triggers cuts in October if that money doesn’t materialize. Under the agreement Monday, the budget relies on assumed federal money to cover deferred payments to schools as well as other budget priorities, according to the person.
“We made compromises across the spectrum,” Newsom said during a briefing Monday. “This is a multi-year framework.”
California is grappling with a $13.4 billion budget shortfall this year and $40.9 billion in the next as pandemic-related shutdowns slam the economy of the most populous U.S. state. In just two months California lost more jobs than it did through the Great Recession.
Newsom said during the briefing that he worked with legislative leaders to put a “substantial amount” of federal stimulus funds that have been already awarded to California’s schools to try and avert teacher layoffs.
State and local government officials across the country are urging President Donald Trump and Congress to help ease the crippling economic losses. A Democrat-backed bill that would give states and cities more than $1 trillion has stalled in Congress.
“Now it’s imperative for our federal partners to pass a responsible and comprehensive relief plan so states and local communities can continue to keep Americans safe while leading our national economic recovery,” Newsom, Senate President pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon said in a joint statement.
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