Housing, Education in SF Could Get a Big Boost From State’s $97 Billion Budget Surplus

San Francisco could see an infusion of cash for housing and education now that the state has a $97.5 billion surplus.

The surplus—up from the $46 billion estimate announced earlier this year— is part of a $300.7 billion budget Gov. Gavin Newsom revealed Friday. He said 94% of the surplus is planned for one-time proposals. 

“No other state in American history has ever experienced a surplus as large as this,” he said.

Outlined in a 400-page document, the governor’s new $300.7 billion budget draft targets school and housing. It also includes $18.1 billion in “inflation relief” in the form of $11.5 billion in tax refunds, including $400 checks to car owners, extended rental and utility assistance and enough money to cover three months of public transit. 

Last year, the governor’s spending plan clocked in at $227.2 billion—so this year’s bloated piggy bank could insulate the state with some $37.1 billion in reserves. The budget will get another revision in June before it goes in front of the state legislature, which ultimately decides whether to approve it. 

Below is a breakdown of the budget and where it could go.

Schools

• Funding for transitional kindergarten-through-12th-grade schools is slated for a total $128.3 billion—the highest ever—which amounts to $22,850 per pupil. Some of that should trickle down to San Francisco as its public schools face a budget crisis. 
• Hastings College of the Law could see $2 million flow into its general fund for operating costs. 
• The University of California, San Francisco, Dyslexia Center is also poised to get an increase of $10 million this year. 

Housing and Homelessness

• The state plans to spend $2.5 billion on housing, including $500 million for things like streamlined development approvals and converting offices to homes, which has so far been too expensive to pencil out in San Francisco. 
• As the state plans to add 2.5 million units statewide by 2031—82,000 in San Francisco—Newsom is calling for 17 housing-related CEQA bills, governing environmental oversight.
• He also proposes $2.7 billion in emergency rental assistance.
• Newsom wants another $2.7 billion to combat homelessness this year. Some of that funding would pay for so-called tiny homes as well as expanded Project Homekey, a program that gets unsheltered people into long-term housing. Some $65 million would go to CARE Court, which would allow judges to sentence people with substance-use disorders to treatment instead of incarceration.

The Pandemic

• Newsom announced $2.3 billion for Covid efforts, including $180 million in vaccines, as the city’s cases rise and public health officials try to get more residents boosted. 

Small Businesses

• Newsom announced $500 million for small business grants. Including the early budget actions, small businesses should see around $5 billion in grants this year. 

Crime and Opioid Crisis

• Newsom plans for a $193 million budget for public safety, including to launch a new fentanyl task force through the state Department of Justice. 

Transportation

• California is investing $10 billion in transportation over the next five years that could help local agencies like San Francisco’s transit division, which currently relies on state and federal cash as it figures out how to generate local revenue. 

Climate

• Newsom plans for an additional $9.5 billion this year as part of his two-year $47.1 billion climate budget. That includes $1.3 billion to address the state’s protracted drought. 
• He also plans for an additional $233 million to prevent and fight wildfires as part of $3.6 billion committed for two years.