Gov. Newsom Proposes $12B To House California's Homeless

Speaker 1: 00:00 The numbers are staggering. In the past two days, governor Gavin Newsome has unveiled parts of a $100 billion pandemic recovery plan for California included in those proposals are a second round of $600 stimulus checks and a $12 billion plan to secure housing for homeless Californians. The massive spending plan comes as California finds itself with an estimated $76 billion budget surplus plus extra billions in federal pandemic recovery funds. All of this is taking place in anticipation of a full reopening of California's economy and with a backdrop of a pending recall election for governor Newsome, Johnny meat is [inaudible] senior editor of politics and government Scott Schafer, and Scott. Welcome. Thank you, Maureen. Now that's a lot of numbers, so Speaker 2: 00:53 I'll try not to add to that pile. Speaker 1: 00:55 Let's talk first about though, we have to the stimulus checks and rent relief. The governor is proposing. Who's getting the stimulus checks this time around, Speaker 2: 01:05 Well, you know, this is a, an expansion of a program that, uh, the state began earlier this year, which was targeted at the lowest income earners. And this is going to, uh, expand that to individuals or households earning up to $75,000, uh, in adjusted gross income. And that's about two thirds. They estimate two thirds of Californians will be getting a check for $600. And then if they have dependent children that they've listed on their income taxes, they'll get an additional 500 so 1100 for those that weren't eligible for any of the earlier checks and then an additional 500 for those who did get that first round of $600 checks, uh, if they have dependent kits Speaker 1: 01:47 And there's also a proposal to kind of fill in the gaps of previous rent relief programs. Tell us about that. Speaker 2: 01:53 Yeah, so the governor is proposing and of course all these are proposals because they have to have a legislature has to have its hearings on the budget, but it's notable that this week, uh, when all this was rolled out, at least in Oakland, uh, that the chairs of the Senate and assembly budget committees were there with the governor. So that's essentially a stamp of approval, although they may ask for even more money given how much there is, but the render assistance, uh, is going to be $5 billion. It's going to be used to pay back rent for those affected by the pandemic. And that's an additional, uh, in addition to earlier, uh, rental assistance that the governor laid out, you know, you have to be eligible, there will be an application process. And I think that's worth noting Maureen because, uh, this is not an automatic payment. And, uh, we were talking yesterday with one of the legislators and they said that, uh, you know, it's been really slow in rolling out that earlier pot of money for renters. Uh, not as many renters have actually benefited from the relief as you might imagine because of that application and approval process. Speaker 1: 02:54 Okay. So governor Newsome actually was in San Diego yesterday. He was proposing a $12 billion program to provide housing for California's homeless. And is it based on what we have seen here in San Diego during the pandemic where motels and hotels are used to provide housing? Speaker 2: 03:12 Yeah, that certainly is part of it, uh, that retrofitting of hotels and motels that, uh, were used during the earlier months of the pandemic. So those would become more, uh, permanent. There's a question that homeless advocates have, which is how is this going to be sustained? I mean, we, yes, we have this enormous budget surplus right now, but how are we going to do it once this money runs out? And this is true for a lot of the things. I mean, the governor today is proposing 14 and a half billion dollars, uh, for the schools, including expanding transitional kindergarten for all age appropriate kids. Well, that's great, but like what happens when there's a downturn? Because as we know in California, the revenues, it's a rollercoaster, they go up and then they come down at some point. So, but what happens when that money runs out Speaker 1: 03:59 And where did all this money come from, would this enormous budget surplus? Speaker 2: 04:03 So if you look at the a hundred billion dollars about a quarter of it, 26, 27 billion is from the recovery act that the Biden administration proposed and Congress passed. And the rest of it largely comes from the booming stock market. I mean, California is disproportionately reliant on income tax and we tax the highest income earners and especially things like capital gains, uh, stock options that get cashed in both that's taxed at a very high level. And because the stock market has just roared back since the pandemic in ways that nobody really anticipated a lot of entrepreneurs have decided, well, this is a good time to do an initial public offering. Let's take advantage of all this exuberance. And so a number of companies have had very successful initial public offerings. And as those employees begin to cash, their stock in California takes its share. So this is really largely driven by the stock market, which just shows how powerful California's sort of innovation economy is when it comes to our state budget. Speaker 1: 05:02 Now, you say that a democratic legislators look like they, this, this, these proposals will sail through, uh, Sacramento without much of a hitch, but what's been the Republican reaction. Well, Speaker 2: 05:17 Some of the proponents of the recall are saying, we can take credit for this tax rebate. You know, he's only doing this because he knows he's, there's a recall on the ballot. And I think there's some truth to that. I think there's actually some truth in general, to the fact that this recall campaign has lit a fire under nuisance. We've seen him out and about in ways we never did before. Uh, the recall became a serious issue. So, uh, I think there's some truth to that. Then you've got like today, Kevin Faulkner is proposing a, uh, broad middle-class tax cuts. Uh, so Republicans are saying, Hey, why do we need all this revenue? Let's not just give a rebate, let's cut our tax rate. And then you've got people like Mitt Romney, Senator Mitt Romney from Utah who tweeted yesterday, why are we giving California $26 billion in federal money? They've got a $75 billion surplus. And so, you know, there's some truth to that as well. Uh, so, you know, generally speaking Republicans are sort of keeping to their, um, you know, talking points and positions, policy positions on taxes, lower taxes, Speaker 1: 06:21 And that involves a lot more numbers to Scott. So we're going to leave it there. I've been speaking with KQBD senior editor of politics and government Scott Schafer. Thank you so much. You're welcome, Maureen. Anytime.