By Assemblymember Phil Ting
Compared to just a few months ago, our world is completely different. As chair of the Assembly Budget Committee, I am proud of all the progressive investments we have made over the last several years as California’s economy grew and unemployment remained at record lows. But that has dramatically changed.
Since our state’s stay-at-home orders took effect in mid-March to help slow the spread of COVID-19, we have seen more than four million people apply for unemployment insurance. Lines at food distribution sites continue to grow. The jobless rate is estimated to jump to 20%. The recession we knew would come one day is here.
To prepare for this, I worked with then-Gov. Jerry Brown to solidify California’s financial foundation. We took the lessons of the last downturn to heart by steadily putting money away while also reducing debt while the economy was strong. This work continued under Gov. Newsom, as we balanced the need to build up savings with a desire to invest in our state and its people. Our efforts culminated in a $16.5 billion rainy day fund as of this April.
Those funds have helped us respond to the COVID-19 emergency in real time. We bought masks and other protective equipment. Schools started distributing meals to students and their families. Hotel rooms were secured for the homeless. Countless needs were addressed without having to pull funds from different programs and agencies.
However, no one could have predicted the severity of this crisis. The pandemic is projected to exhaust the rainy day fund and then some. California will quickly swing from surplus to deficit as tax revenues decrease and expenditures increase in response to COVID-19. Estimates show our budget shortfall will range between $31 billion and $54 billion. Unlike the federal government, our state cannot borrow money to cover deficits.
Unfortunately, this means all options are on the table to close the budget gap, including difficult decisions on potential cuts and new revenues. The situation really pains me. California has achieved so much with our last few budgets to create opportunities through increased per-pupil spending in K-12 education: additional funding for public universities and student financial aid; progress toward universal healthcare; and expanded childcare subsidies so parents can work.
We will fight to preserve these investments as we get a better idea of our revenue picture after the new state tax deadline of July 15. New ideas to boost revenue will be explored, such as a tax on vaping products and an economic stimulus bond to create green jobs. We also hope the federal government will continue to come through with aid. California has joined Nevada, Washington, Oregon and Colorado in a Western States Pact to ask for $1 trillion in direct and flexible relief.
We are working to pass a balanced state budget by the constitutional deadline of June 15. At a time when people need government the most, we will work to ensure no families are left behind in our recovery. My office stands ready to assist constituents; please visit https://a19.asmdc.org/ for COVID-19 resources and contact us at (415) 557-2312 if you need assistance with unemployment insurance or other state programs.
Phil Ting (D-San Francisco) represents the 19th Assembly District, which includes the west side of San Francisco along with the communities of Broadmoor, Colma and Daly City. He can be reached at (415) 557-2312 or at firstname.lastname@example.org. For more information and updates, visit https://a19.asmdc.org.