California’s good-times budget.
In a January budget proposal of record size, Gov. Gavin Newsom touted a projected multibillion-dollar surplus and new programs to reshape homeless services, boost wildfire prevention and provide health care for immigrant seniors living in the country illegally.
That plan has been dashed by the economic turmoil caused by the coronavirus outbreak, which experts say is pushing the U.S. into a recession.
Although Newsom does not have to unveil a revised 2020-21 spending plan San Francisco News until May, it’s clear that the widespread shutdown of California’s economy will take a huge bite out of the personal income, corporate and sales taxes that fund much of the state budget. The governor and lawmakers are facing scaled-back wish lists and the likelihood that they won’t be able to put this budget to rest even for months after it’s due.
Newsom has nevertheless expressed confidence about what’s to come. At a news conference last week, he stressed that “nothing about our economic situation is comparable” to the 2008 recession, in particular, because, after a decade of expansion, California has built up more than $20 billion in reserves.
“We’ve never been in a better position to weather a recession. Period. Full stop,” Newsom said.
With the economy in flux, it’s difficult to know how big a hit California will take. The economic forecast used by the state Department of Finance to create Press Release Distribution Services In San Francisco Newsom’s budget plan accounted for a slowdown, but the stock market has since dropped well below those projections.
Daniel Mitchell, a professor of management and public policy at UCLA, said the coronavirus has already been a “tremendous shock” to the economy. About half a million people filed for unemployment in California just last week. Even if Congress tries to stimulate activity by sending everyone a check, he said, it won’t have much effect if people have nowhere to spend the money while stores and restaurants are largely closed. Rebuilding those industries could take years.
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