GOVERNMENT RELATIONS


Recession Continued from page 5


known until the end of August when revenues are collected.


Addressing Budget Shortfall Over Multiple Years


Given the huge deficit, Gov.


Newsom and the Legislature will be addressing the budget shortfalls over multiple years, by utilizing the state’s emergency reserves, cutting spending and seeking revenue accelerations. Tese efforts will likely play out in a second round of budgeting given the steep and unprecedented economic and health crisis the state finds itself in. While solutions to the budget deficit have been difficult to identify, it is clear that the most essential priorities – public health, public safety and public education – will continue to be at the top of the order to be funded. Unlike the federal government, the California constitution requires


In January, Governor Newsom proposed a $220 billion state budget and at the time, California enjoyed healthy “rainy day” reserves totaling over $17 billion. Today, the Governor and Legislature anticipate the state budget deficit to total over $50 billion.


the Legislature to approve – and the Governor to sign – a budget that is balanced. Unlike its individual states, the federal government has the ability to finance debt and has done so in


the trillions of dollars to aid in the economic recovery so far. However, more will have to be done to shorten the duration of this recession. Fortunately, it is widely under-


stood that an effective tool to expedite an economic recovery is investing in development, housing and infra- structure. As we experienced in previous downturns, the churn of dollars hastens job growth and confi- dence in financial markets. Coupled with previous prudent fiscal action by legislatures, governors, and voters, California has never been more recession ready.


Construction Among Frontrunners to Recovery


While it is expected that there will


be difficult deliberations in the coming months, current Sacramento leaders have plenty of history on how best to recover smartly from a recession. And, while there has been a slowdown in work, the essential and critical nature of our industry has made it so that we will continue to be amongst the frontrunners on the road to statewide recovery. It goes without saying that the road


forward is dependent on the ability to realize immunity from COVID. As the home to much of the country and world’s innovation, California is poised to rapidly scale up the eventual vaccine and therapeutics necessary for all of us to resume to our past “normal.” Te early actions from our elected leaders stemmed the tide for what would have assuredly been catastrophic levels of COVID caseloads. Suffice it to say, the hope is that the COVID recovery will occur at a faster pace than previous economic downturns because of its unique onset. Now more than ever, our elected


leaders need to lean on California’s economic and industry leaders – such as AGC and its membership – to repair her fiscal health. 


6 July/August 2020


California Constructor


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