In his recently released state budget proposal, Governor Gavin Newsom made two important and supportive statements on California’s business and economic climate.
First, he reinforced the need for state fiscal stability. While enjoying the benefit of more than $20 billion in surplus revenues, he chose to direct most of the surplus either to bolstering the Rainy Day reserve, paying down debts, or spending on one-time programs or capital projects. In times of manifest economic uncertainty, the Governor’s prudent allocation of tax revenues will pay off during the inevitable downturn, minimizing the need to increase taxes or cut education or safety net spending.
Second, he underlined his commitment to producing more housing for all income levels. The undersupply of housing is the biggest driver of California’s high cost of living, and therefore the state’s high poverty rate. Housing affordability also discourages in-state business growth and punishes workers with long commutes.
The Governor’s consistent commitment to fiscal prudence and housing production will strengthen the state’s economic foundation.
Several other budget proposals are noteworthy because their ultimate shape may directly affect the ability of businesses to grow in California.