Faced with a $54.3 billion deficit, the state of California declared a budget emergency on Thursday that will allow the use of reserve funds in response to the ongoing coronavirus crisis.
Gov. Gavin Newsom issued a proclamation of a budget emergency that he says will clear the way for the California Legislature to pass legislation allowing the state to draw from its rainy day fund, the Budget Stabilization Account. The Budget Stabilization Account currently consists of $16.1 billion in reserves, according to Newsom’s proclamation.
The state must use a portion of the reserves in the 2020-2021 fiscal year, which begins next week, in order to address the coronavirus pandemic, according to the proclamation.
Newsom’s office said in a press release the proclamation will ensure the availability of funding for medical and personal protective equipment; services for vulnerable populations; and expenditures that would arise from a potential surge in coronavirus hospitalizations.