Housing Reform Still Lacking as Governor Proposes Program Reductions

Budget Subcommmittee #1 Education

In Tale of Two Projects, Newsom Administration Deprioritizes Central Valley Medicine. Thursday’s hearing included discussion of two contrasting University of California (UC) facility projects: a joint research complex shared by UCLA and private technology companies, and the construction of facilities for a new medical school at UC Merced. The state previously authorized $500 million in up-front cash to build a joint UCLA-corporate research complex, an amount reduced to $200 million this year after an existing Google facility became available. At the hearing Thursday, a UC representative testified that the proposal originated from the Governor’s office, not UC itself. Also, Governor Newsom previously stated publicly that he sought the original $500 million at the request of two billionaires.[1] 

In contrast, there is longstanding bipartisan concern over the lack of medical providers in the Central Valley, which led to a decade-long effort to create a medical school at UC Merced. However, rather than provide up-front funding for this medical school, the Governor’s budget asked UC Merced to issue bonds for that project. The state’s cost for the medical school would be only $243 million, less than half what Governor Newsom originally obtained at the billionaires’ request to help wealthy technology corporations with a research park. Senate Republicans believe that building a medical school to help address long-recognized health care shortages in the Central Valley should take priority in the budget over a billionaire-backed corporate research partnership. Votes will be held at a future hearing on the UC Merced medical school funding. 

Budget Subcommittee #2 Resources, Environmental Protection, and Energy

Senator Dahle Urges Concern for Low-Income Residents as Taxes and Fees Raise Costs. During Thursday’s hearing, Senator Brian Dahle (R-Bieber) voiced concerns over Governor Newsom’s proposed tax hike on pesticides in California, warning of its potential to strain the affordability of essential food and household products for Californians. He also highlighted the alarming fee hikes in another budget request proposed by the Water Resources Control Board, projecting a staggering 39% increase that could significantly affect water rates and housing costs statewide. Expressing frustration over the broad fee authority granted to regulatory agencies, Senator Dahle emphasized the urgent need for greater transparency and public scrutiny in these decisions.

“Letting the perfect get in the way of the good,” remarked Senator Dahle, stressing the delicate balance between environmental conservation and the economic well-being of Californians. He emphasized that these proposed measures conflict with the state’s commitment to affordable housing and equitable access to clean water and safe products. Senator Dahle’s concerns extend beyond state borders, urging national policymakers to take heed of California’s regulatory landscape. With a call for increased transparency and coherence in policy decisions, Senator Dahle implored his Democratic colleagues to prioritize the interests of all Californians.

Budget Subcommittee #3 Health and Human Services

Breaking Through Bureaucracy to Improve Lives More Comprehensively. The subcommittee heard the proposed budget of the Department of Public Health, which plans to spend almost $5 billion in state funds in 2024-25. Senator Shannon Grove (R-Bakersfield) noted that this spending is not increasing access to healthcare. Senator Grove noted how pediatric wellness visits are declining, how housing stability is strained because of homeowner’s insurance regulations, and how food security could be improved through investment in California agriculture. Senator Grove challenged the department to work across all of state government to find “whole-person” solutions that actually improve health outcomes. The department’s budget was held open for a vote at a later date.

Budget Subcommittee #4 State Administration and General Government

Housing Reform Still Lacking as Governor Proposes Program Reductions. The subcommittee heard proposals to reduce $1.7 billion in spending on housing programs. As a result of misguided California policies, the cost to build homes in this state continues to increase, straining not only the budgets of Californians, but the state budget as well. In comparison with private sector development, low-income housing is saddled with more stringent environmental and labor standards and frequently faces high parking requirements, exorbitant fees, lengthy local approval processes, and abusive legal challenges that can force home construction to stall. Senator Roger Niello (R-Fair Oaks) commented on California’s lack of resources and suggested it is time to rescind policies that have driven up the cost to build housing. Given the limited resources available, the state’s General Fund support for housing would stretch further if policies that have increased the cost of housing were reformed.

Budget Subcommittee #5 Corrections, Public Safety, Judiciary, Labor, and Transportation

No Magic Pot of Money to Continue Transit Bailout. The subcommittee discussed the Governor’s proposal to delay $1 billion in promised funding for struggling transit operators by one year. The 2023-24 budget included $2 billion General Fund to bail out public transit, with an additional $2 billion planned for 2024-25. Senator Kelly Seyarto (R-Murietta) noted that absent a “magic pot of revenue” to boost future budgets, delaying the funding by one year doesn’t fix the problem and can complicate local budgets relying on future funding that may never materialize. Alternatively, the Legislative Analyst’s Office recommended reducing the full $2 billion planned for the budget year to recognize the likely event that the state’s financial situation worsens. This is an option the Legislature should consider. Continuing to bail out these entities fails to recognize fundamental challenges, including a lack of demand for transit service and outdated business models.

[1] LA's old Westside Pavilion will become UCLA science center - Los Angeles Times (latimes.com)