Governor Declares Budget Emergency Due To COVID-19 Pandemic

Governor Gavin Newsom

Sacramento, CA – Governor Gavin Newsom declared a budget emergency on Thursday, allowing for nearly $8 billion to be taken from a state reserve account to help plug a large budget deficit brought on by the coronavirus.

Later in the day, the state Senate is set to vote on the budget and the Assembly the next day. It will take effect on July 1.

The COVID-19 pandemic quickly drained the budget surplus that California began the year with as the state delayed tax collections, businesses suffered, and spending soared to fight the virus. That left the state with a $54.3 billion deficit. Newsom had to declare the emergency to legally be able to take $7.8 billion from the state’s “rainy day” fund as proposed in the budget, which is about half of that fund.

The rest of the shortfall will be made up through a combination of pay cuts to state workers and delayed payments to public schools, internal borrowing, spending cuts, and temporary tax increases on businesses. To avoid some of those measures, Newsom is looking to the federal government for money.

In an emergency proclamation, found here, the governor stresses that money is needed to help pay for coronavirus related expenses like the purchasing of personal protective equipment, medical supplies, and services for vulnerable Californians. It was the final piece required to balance a spending plan of over $202 billion.