Boasting an anticipated multi-billion dollar budget surplus for the second year in a row, California Gov. Gavin Newsom on Saturday unveiled a $2.7 billion spending plan to fight the unrelenting COVID-19 pandemic.
Newsom’s proposed $2.7 billion COVID-19 Emergency Response Package, which includes a $1.4 billion request for emergency funds, would be spent on efforts to ramp up vaccine and booster administration, expand statewide testing capacity and increase medical personnel in the coming year, according to the governor’s office.
It marks a nearly 60% increase in the amount of COVID-19 funding provided in last year’s budget — $1.7 billion.
“From day one California has taken swift and direct action to battle COVID-19 with policies that have saved tens of thousands of lives, but there’s more work to be done,” Newsom said in a written statement Saturday. “Our proposed COVID-19 Emergency Response Package will support our testing capacity, accelerate vaccination and booster efforts, support frontline workers and health care systems and battle misinformation.”
On Monday, the governor is set to lay out his full budget proposal for the 2022-23 fiscal year. Independent analysts last fall projected that the state would see a $31 billion state budget surplus. Newsom’s spending plan next week will provide an updated estimate. And, over the next several months, state lawmakers will negotiate the specifics ahead of a June 15 deadline to pass the budget.
The early announcement about the COVID-19 Emergency Response Package comes amid an alarming surge caused by the highly contagious omicron variant and as California’s emergency rooms, schools and businesses contend with staffing and testing shortages.
California’s closely-watched 7-day average of new daily cases has averaged a record high of more than 65,000 cases this week, according to the latest data. And, in highly vaccinated Santa Clara County, more than 2,000 people are testing positive on average each day, the county’s online database shows.
As of Saturday, more than 10,000 patients with COVID-19 were hospitalized due to the virus, according to state public health officials.
Still, officials said they anticipate that by early February the state will see a noticeable decline in cases.
“The crystal ball is hazier than it has been in the past,” said a Newsom administration official who would not speak on the record. “We’re watching the data every day, trying to make it as clear as we can.”
The bulk of the new emergency pandemic package — $1.2 billion — would focus on bolstering COVID-19 testing, including expanding hours and capacity at state-run testing sites and distributing millions of free COVID-19 antigen tests to local health departments and community agencies. That funding would be in addition to the dollars recently spent on expanding testing facility hours this fiscal year and distributing millions of antigen tests for students of K-12 public schools, which state officials are currently completing.
Newsom on Friday deployed more than 200 members of the California National Guard to further bolster statewide testing capacity by assisting with crowd control, patient check-in and filling in for staff members who may be out sick.
Amid an uptick in outbreaks at state prisons, the package earmarks $625 million to increase testing capacity and vaccinations at California Department of Corrections and Rehabilitation facilities. State corrections officials suspended in-person and family visits to inmates beginning Saturday because of increasing COVID-19 cases among inmates and staff.
The remaining funds would be used to expand the state’s vaccination education campaign, offer free transportation to vaccination appointments, provide additional staffing for health care systems and increase humanitarian efforts at the California-Mexico border.
Instead of waiting for the new fiscal year to roll everything out, Newsom is asking the legislature for $1.4 billion in emergency funding to immediately equip California’s health care system with supplies and staffing to battle the current surge and for the passage of updated legislation for new COVID-19 supplemental paid sick leave policies for frontline workers. Newsom’s administration said they anticipate working with state lawmakers over the coming days and weeks to get these items accomplished as quickly as possible.
In November, the California Department of Public Health deployed more than 2,200 staff members to health care facilities across the state to help them navigate an anticipated winter surge. The requested $1.4 billion would allow the state to continue offering additional staffing and expand it further, according to Newsom’s administration.
“As the current omicron surge demonstrates, no one knows for how long the COVID-19 pandemic will endure or the enormity of its impact on California for years to come,” President & CEO of the California Hospital Association Carmela Coyle said in a written statement. “What we do know is that the demands on our state’s health care system have never been greater, and we need all the support we can get.”
Although the state is in the midst of a record-smashing coronavirus case surge, California is also bringing in a historic stream of tax collections. In September, collections from taxes on income, sales and corporations were 40% higher than the same time last year and almost 60% higher than September 2019 — a trend fueled by retail sale growth and rebounding stock prices, according to the state’s independent Legislative Analyst’s Office.
The anticipated surplus is so substantial that it could push California past a constitutional limit on state spending, which could lead state lawmakers to provide cash rebates to taxpayers. As part of last year’s multi-billion dollar budget surplus, lawmakers sent stimulus checks to millions of Californians.
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