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Gov. Newsom outlines priorities in first California budget

SACRAMENTO, Calif. (AP) – California Gov. Gavin Newsom on Thursday released his first budget proposal, outlining $ 144 billion in general fund spending and $ 65 billion more from bonds and special funds.

It kicks of five months of negotiations with lawmakers, who must approve a spending plan by June 15.

Here’s a look at what’s in his plan:


The budget assumes that California will have to pay nearly $ 1 billion for last year’s wildfires that devastated the Sierra Nevada foothills town of Paradise, among other communities. The $ 923 million is 25 percent of the overall projected cost, with the federal government covering the rest.

It includes $ 31 million to make up for wildfire-related property tax losses in Butte, Lake, Los Angeles, Orange, Riverside, Shasta and Siskiyou counties. Another $ 19 million aids schools that lost revenue because of wildfires. Newsom also proposes to waive the local share of debris removal costs, saving counties $ 155 million on what is projected to be a $ 2.5 billion cleanup.

He’s proposing $ 60 million this year and next to improve emergency communications, and seeking a new fee on consumers to generate $ 170 million annually. Another $ 16 million would finish the California Earthquake Early Warning System.

His budget includes more than $ 400 million to reduce fire-prone fuels and improve the state’s firefighting ability. About half the money goes to forest management efforts, which have frequently been criticized by President Donald Trump. Nearly $ 8 million would go to create five California Conservation Corps firefighting crews and four Forestry Corps crews.


Newsom wants $ 1.75 billion to combat the state’s housing crisis and $ 500 million toward homelessness programs.

His plan would expand state tax credits to encourage more low- and moderate-income housing; build housing on surplus state property; and ease environmental protection laws to help encourage more housing. He proposes withholding money if local communities don’t meet their housing goals or stand up homeless shelters.

Sen. Scott Wiener of San Francisco, the Democratic chairman of the Senate Housing Committee, called it a bold proposal to help overcome the state’s need for 3.5 million new homes.

But the California State Association of Counties objects to Newsom’s proposal to tie transportation funding to new housing units. The association’s Darby Kernan said it is concerning that Newsom would withhold critical transportation money when counties rely on private developers to build units.


The budget recommends a sharp increase in spending for cannabis programs. But it’s an open question whether it will be enough to help steady California’s shaky legal marketplace.

It recommends just over $ 200 million for marijuana-related activities, more than a 50 percent boost from the current year. The state broadly legalized marijuana on Jan. 1, 2018.

Income from the state’s excise tax on marijuana is projected to be $ 355 million by the end of June, roughly half of what was once expected. What that means is a lot of consumers are still buying pot in illegal shops – where there are no taxes – rather than in licensed dispensaries.

The courts budget includes nearly $ 14 million for resentencing of thousands of drug offenders whose offenses are no longer crimes since California legalized recreational pot.


Newsom says he plans to end California’s current juvenile justice system “as we know it,” including by shifting the state’s few remaining juvenile justice facilities from the corrections department to the Health and Human Services Agency.

About 650 youth are in state lockups, down from more than 10,000 in the early 2000s. San Joaquin County probation chief Stephanie James, president of the Chief Probation Officers of California, said Newsom’s proposal could imperil reforms made in juvenile justice over the last decade. Lawmakers have rejected previous attempts to send all juvenile offenders to county lockups.

The budget projects $ 78.5 million in savings from a 2014 ballot initiative that reduced criminal penalties and requires that the savings be spent on rehabilitation programs. That’s up nearly $ 14 million over last year.


Newsom proposed expanding Medi-Cal coverage to immigrants who are young adults and lack legal status in the United States at a cost of $ 260 million. In California, people who can’t prove they’re legally in the country age out of full-scope Medi-Cal coverage when they turn 19. Newsom’s proposal would raise the cutoff to age 26.

The budget also includes $ 25 million for an immigration rapid-response program to help address the crisis on the border following the arrival of Central American migrants. It also includes $ 75 million for immigration-related services including legal assistance for college students.


The budget includes a $ 3 billion one-time payment to California’s teacher pension fund on behalf of schools to help districts that are seeing more of their budgets eaten up by pension obligations.

Newsom wants $ 1.4 billion for higher education, including about $ 400 million for the community college system aimed at waiving second-year tuition.

Newsom wants to invest $ 500 million in infrastructure to provide more childcare and $ 750 million for kindergarten programs. He also wants to boost a tax credit for families by more than a half-billion dollars.


The governor wants to set aside $ 13.6 billion for savings, paying down debts and taking a bite out of unfunded liabilities for retiree pensions.

His proposal would use $ 4 billion to pay off debts accumulated during the Great Recession as the state borrowed from dedicated funds, including transportation accounts, to pay for general expenses. It would add $ 700 million to a safety net reserve account created last year to protect services for the poor during a recession.

Newsom wants to pay down a chunk of the $ 257 billion in unfunded liabilities for retiree pensions and health care with a $ 4.8 billion payment.


Associated Press writers Michael R. Blood, Jonathan J. Cooper, Janie Har, Kathleen Ronayne, Amy Taxin and Don Thompson contributed to this story.

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