Gov. Newsom Says 'Cold, Hard Reality' Is California's Rainy Day Fund Will Be Depleted
California had a rainy day fund -- about $20 billion in reserves -- going into this crisis. But a lot's happened since Gov. Gavin Newsom gestured to the chart above in January.
He said today that he will completely rework the budget he released at that time, in light of the devastating financial effects of this pandemic.
We talked to him about the state's response so far to the COVID-19 pandemic and asked:
Do you anticipate that rainy day fund being depleted as a state spends to help people recover both physically and financially from this? Can anything be done to preserve some of it?
"No, that won't happen," Newsom said of being able to preserve the fund. "2.2 million people unemployed, unemployment rate that will get up to a number we've never seen in our lifetime."
"So, the answer is no. And that's an honest answer," he said. "Forgive me, and I don't mean to be flippant in the response. I'm dealing with cold, hard reality facts. I'm working to completely repurpose my January budget. In what we called the May Revise, you'll see that reflected, and we'll pull back."
Newsom said he's looking at the state's finances, as he always does, in a three-year timeframe.
"That reserve will not exist after three years," he said, "without significant, significant economic stimulus and our support from the federal government."
Listen to the entire interview from our newsroom's local news show Take Two, which airs on the radio at 89.3 KPCC: