California’s Massive $97.5 Billion Budget Surplus Offers a Path Forward to a Just Economy


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The Greenlining Institute Urges Legislators to Invest Historic Budget Surplus in California’s Most Vulnerable Communities to Close the Racial Wealth Gap
Governor Newsom’s California budget revision released detailed how the governor plans to spend the state’s massive $97.5 billion budget surplus. The May Revise includes substantial investments to combat climate change, increase access to healthcare including reproductive healthcare, and provide economic relief to California residents. These investments double down on Gov. Newsom’s forward-thinking January budget proposal, and offer a path forward for advancing racial equity and improving the lives of all Californians. 

However, given the inequitable recovery from COVID-19, the devastating impacts of climate disasters, and the widening racial wealth gap, these investments are an important stop-gap but nowhere near the comprehensive redistribution of resources we need to ensure an equitable economic future for all. While this budget proposal is a massive investment, no matter how substantial the budget surplus is this year, it won’t fully redress the long legacy of injustice created by generations of underfunding communities of color. 

“California’s historic budget surplus comes at a time when the racial wealth gap is exploding and the climate crisis is worsening. Communities of color need bold, long-term investments in a future where all communities can thrive,” said The Greenlining Institute President and CEO Debra Gore-Mann. “At this moment, lawmakers have a responsibility to ensure that communities of color can share in the benefits of the state’s strong financial standing. The Governor and Legislature must seize this $100 billion opportunity to commit to a long-term vision for racial equity that goes beyond the pre-pandemic status quo.” 

“Now more than ever, California has an opportunity to finally make innovative investments that anticipate the harsh realities that low-income communities and communities of color face in a California that is only getting hotter and more expensive. For too long, advocates like us have been told the funding isn’t there,” said Alvaro Sanchez, Vice President of Policy at The Greenlining Institute. “Well, now it’s time to put our money where our mouth is and fully fund the programs that we know work by putting low-income communities of color first. Because the money won’t always be there, we also need an Office of Racial Equity to ensure the commitments lawmakers make to communities of color today are enacted tomorrow.” 

Highlights of the governor’s May Revise include:

  • Economic Relief for Californians: 
    • Utility Debt Relief: $1.4 billion to address utility energy debt, $1.2 billion for residential energy debt, and $200 million for water utility debt. This crucial relief can prevent hundreds of thousands of California households from losing vital services or having to make the choice between basic human needs like power, food, or rent.  
    • Rebates: $11.5 billion for tax refunds to help address inflation including $400 checks for California drivers, and $750 million for three months of free public transportation. The Greenlining Institute applauds this effort to support struggling Californians. However, we look forward to working with the Legislature to ensure the majority of these resources are as targeted and impactful as possible and delivered in a way that maximizes benefits to our most vulnerable communities.  
  • Community Resilience to Climate Change: $170 million over two years for Community Resilience Centers to offer immediate-term respite and relief at trusted facilities during climate disasters alongside crisis preparedness and recovery in disadvantaged and vulnerable communities. We are pleased to see additional investments for these centers, but urge the Legislature and Governor’s Office to allocate $1 billion to meet the full need for much-needed resilience centers across the state, especially in light of the large surplus. 
  • Zero- Emission Vehicles: $1.75 billion in accelerated funds for the Clean Cars 4 All, Clean Vehicle Assistance Program, Clean Mobility Equity Programs and Charging Infrastructure. No new funding for the Clean Vehicle Rebate Project, which has been demonstrated to mainly benefit higher-income households. It’s time for the decade-long investment in CVRP to start ramping down.
  • Zero Funding for an Office of Racial Equity: Without the infrastructure to create, staff, and implement long term equity strategies, lawmakers will not be able to maximize the impact of the equity investments made with this historic budget surplus. The Greenlining Institute urges the Legislature and Governor’s office to allocate at least $40 million to fund the establishment of a statewide Office of Racial Equity, consistent with SB 17 (Pan). 

“There is no reason not to fully invest in our communities. We have the resources, we just need the political will,” Gore-Mann said. “The Greenlining Institute supports the equity priorities in the May Revise and we call on the Legislature to move swiftly to approve a budget that meets the dynamic needs of California’s diverse communities,” she continued. “Building a more equitable society for California will require an authentic commitment to build a broader economic foundation that secures a multi-generational and inclusive future.”


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