GOVERNMENT RELATIONS


California Bracing for COVID-19 Headwinds T


By Felipe Fuentes


he COVID-19 pandemic interrupted what was an unprece- dented period of economic growth


in California. Prior to the pandemic, the Golden State was experiencing a record 126 months of economic expansion, 3.9% unemployment rate and an annual State Gross Domestic Product (GDP) growth rate of 3.8%. Unfortunately, the government-


mandated limitations set on non-essential businesses intended to stop the spread of the virus resulted in a tremendous freeze on consumer spending. Moreover, the closing of restaurants, service sector jobs and other small businesses resulted in record job losses. While the full impact of the


COVID-19 recession still remains unknown, it is clear that Sacramento and its elected representatives will


use the annual state budget process to address the damage inflicted on those hit hardest during the pandemic. Original budget projections this past summer warned of deficits in the range of $31-54 billion. However, revenue from fall 2020 exceeded expectations and produced a small surplus in the tens of billions of dollars. It should be noted that 47% of the total general fund revenue comes from the top 1% of California’s taxpayers. Put another way, high-income


Californians account for almost a third of what is spent on public education, corrections, and social net programs. Presumably, it will be these same taxpayers that help California in her economic recovery.


Precautionary Budget Reserves


Te state budget proposed by Gov. Newsom in January focuses on


protecting against the spread of the pandemic as well as two of the Governor’s chief objectives: climate change and tackling homelessness. Despite the unexpected boost of revenues, the budget proposal anticipates an economic downturn in years ahead and budget reserves of $21 billion as a precaution. Capitol budget staff warned that


a moderate recession could result in deficits of $40-70 billion dollars over the next three years. Unlike some members of the Legislature, the Governor is not proposing any new taxes at this time. Te Biden administration recently


announced a $1.9 trillion dollar proposal to “rescue” and “recover”


Laborers’


 Union of


SKILLED, TRAINED, SAFE


          


 


HOURS OF TRAINING


443,488


3,114 CLASSES PERFORMED


 6 March/April 2021 1,430


APPRENTICESHIP GRADUATES


31,679 STUDENTS TAUGHT


Oscar De La Torre


Northern California District Council of Laborers


(925) 469-6800 Jon P. Preciado


Southern California District Council of Laborers


(626) 350-6900 California Constructor North America


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