Assemblymembers Tim Grayson and Tom Daly Author Letter to Urge Governor Newsom to Increase Budget Reserves

For immediate release:

SACRAMENTO, CA — Assemblymember Tim Grayson (D-Concord) and Assemblyman Tom Daly (D-Anaheim) authored a letter urging Governor Gavin Newsom to increase reserves in the proposed 2021-22 State Budget. Sixteen members joined the authors in support: Assemblymembers Cecilia Aguiar-Curry, Marc Berman, Jim Frazier, Laura Friedman, Jesse Gabriel, Eduardo Garcia, Jacqui Irwin, Evan Low, Jose Medina, Cottie Petrie-Norris, Sharon Quirk-Silva, James Ramos, Robert Rivas, Blanca Rubio, Rudy Salas, and Carlos Villapudua.

 

“Better safe than sorry. Our schools, firefighters, and local state healthcare professionals are counting on us to be responsible stewards of state funds and we rely on budget reserves to avoid draconian cuts to these critical programs.” said Grayson. “We must safeguard the state from the volatility of Wall Street by saving sufficient state revenues and securing our financial position during these unpredictable times.”

 

“Stronger than expected state revenues, along with an infusion of federal funds, gives us a rare opportunity to truly save for a rainy day,” said Assemblymember Daly. “Nobody likes making the kinds of cuts to programs and services that we typically see during a serious economic downturn. But by increasing our reserves now, we’ll reduce the need for deep cuts the next time our economy goes south.”

 

The letter notes the state’s dependency on volatile revenue sources and cites the Governor’s own characterization of the Budget as “inherently unpredictable” in the May Revision. Signers of the letter emphasize the vulnerability of critical community services and note that while the 2020 budget presented by the Governor predicted a 30 percent drop in the S&P 500 by year end, the S&P 500 instead rose by 30 percent. The members conclude by stating that there is no better time than now to build a healthy reserve to protect against future downturns.

 

“If we have learned one thing from this last year, it is just how quickly our economic fortunes can change,” said Assemblywoman Jacqui Irwin.  “It is imperative that we use this year’s extraordinary budget surplus to build a significant reserve. When the next recession comes, we will thank ourselves for the foresight.” 

 

“Last year was a lesson in just how volatile our economy is,” said Assemblywoman Cottie Petrie Norris (D-Laguna Beach).   “This unprecedented budget surplus is a critical opportunity to set the stage for California’s long-term success. Maximizing our reserves is a wise, pragmatic investment to ensure future resiliency.” 

 

“Taking care of our most vulnerable communities should always be our priority,” said Assemblymember Rubio. “Setting aside money is a prudent decision that will allow us to safeguard funds for the programs that benefit constituents most.”

 

“Building a strong savings account while we have a budget surplus is the responsible path forward to ensure our working families are not hurt during the next recession,” said Assemblymember Salas.

 

A copy of the letter can be found here

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