With the impact of COVID-19 deepening and the May Revision of the state budget on the horizon, Governor Gavin Newsom was joined by Senate President pro Tempore Toni G. Atkins (D-San Diego), Speaker Anthony Rendon (D-Lakewood) and Assembly Republican Leader Marie Waldron (R-Escondido) in sending a letter to U.S. Congressional leadership, asking them to authorize $1 trillion in direct and flexible relief funding to states and local governments.
The letter states that record amounts of lost wages and business failures, spiraling unemployment, and soaring, unplanned COVID-19 related costs have thrust states and local governments to economic chasms that are likely to exceed that of the Great Recession. The additional aid would preserve core government services, such as public health, public safety, and public education, and would help get Californians back to work, according to Atkins’s office.
“The economic fallout of this crisis is severe, from the toll it has taken on individuals and families to the damage it has done to our local and state budgets. This federal assistance will help prevent further harm to our people and our communities, and protect the resources and services that are critical to our daily lives,” said Atkins.
On Monday, Newsom said the state’s budget deficit is now in the tens of billions of dollars directly caused by the impact of COVID-19. Last Thursday, Newsom announced that California faces a $54 billion deficit.
Just 90 days ago the state projected a $6 billion budget surplus but since March 12, 4.5 million Californians have filed for unemployment and pandemic unemployment assistance and the state has distributed $13.1 billion in unemployment, $3.4 billion just last week. Newsom warned that an unemployment rate between 20-25% is likely when the new numbers are released.