Senate Democratic leaders on Thursday unveiled a budget plan for spending the state’s massive surplus. It would increase drought and water spending 10-fold over Gov. Gavin Newsom’s January budget proposal. The “Putting Wealth to Work” plan capitalizes on $68 billion in estimated tax revenues, up from the $29 billion in the January forecast by the Legislative Analyst's Office.
The spending includes $200 in cash rebates for millions of Californians to stem high inflation and gas prices—and Republicans were quick to point out how it mirrors their proposal. The plan would set aside $10 billion to reimburse small businesses for added costs from the state’s COVID-19 paid sick leave program.
In the $7.5 billion drought package: $1.5 billion would support a new California water trust that would buy out senior water rights through land acquisitions. Another $500 million would scale up a new program for repurposing fallowed farmland, which is currently budgeted for $50 million. The plan offers $1.5 billion each for drinking water, improving watersheds and grants for recycling, stormwater capture and groundwater cleanup. And $1 billion would support dam safety and flood management.
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The overall $18 billion climate budget would add more than $6 billion for wildfires, more than $3 billion for sea level rise and $1 billion for conserving biodiversity and expanding outdoor access. The report alludes to adding more funding for programs on manure methane reduction as well.
The Senate plan would size up spending on infrastructure, homelessness and housing—such as adding $100 million for a farmworker housing program.
Newsom’s initial budget proposal followed a wet December and dedicated just $750 million for drought response, with the option to tap into another $250 million in May.
With a better estimate of the state’s tax revenues in hand, the administration has just two weeks to refine its budget proposal. That will tee up a month of whirlwind negotiations with the Legislature before passing a final budget agreement in mid-June.