California Gov. Gavin Newsom Gavin NewsomCalifornia family frustrated that governor, Harris used fire-damaged property for 'photo opportunity' Pac-12 moves toward 'return to competition' after Big Ten announces resumption of football season Ben Shapiro's Daily Wire leaving California: 'Terrible governance has consequences' MORE (D) on Friday proposed significant new spending to combat the state’s growing homelessness crisis and worsening wildfires while socking away billions more in a rainy day fund for a potential economic downturn on the horizon.

Newsom, proposing his second budget as governor, highlighted record revenues generated by a booming economy in a state that is unusually reliant on capital gains taxes. But he said the state faces its share of problems in the years ahead.

“Despite the progress we’ve made, there are deep, structural challenges that threaten our state’s future and demand our urgent attention. These problems — our widespread affordability crisis, expanding homelessness crisis and catastrophic wildfires — have been decades in the making and won’t be fixed overnight,” Newsom said in a statement.

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Newsom’s $222 billion budget proposal called for more than $1 billion in new spending to get homeless families into temporary or permanent shelter. A report released this week by the federal Department of Housing and Urban Development found California’s homeless population grew by about 16 percent last year.

Newsom asked legislators to invest $750 million in a new California Access to Housing and Services Fund, a program aimed at building new affordable housing in a state squeezed by lack of inventory. He sought changes to the state Medicare program to better address behavioral and mental health challenges that are disproportionately common among those without a home.

After another year of devastating wildfires, Newsom asked legislators to appropriate $1 billion over four years to prevent, track and fight new conflagrations. The money would add more than 670 new firefighters to the state’s wildfire management agency and spend $100 million on a pilot program meant to protect homes and structures on the front lines of what is known as the Wildland Urban Interface, areas most likely to be susceptible to fires.

Newsom wants to create a new agency, the Wildfire Forecast and Threat Intelligence Integration Center, to better prepare the state to track fires before they become major and damaging events.

The budget also calls for $12 billion over five years to take on climate change, both through a resilience initiative that would protect vulnerable areas and a cap-and-trade program. A proposed Climate Catalyst Fund would finance local government investments in low-carbon transportation options and sustainable agriculture programs.

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Newsom proposed expanding the state’s Medicaid program to cover everyone in the state over the age of 65, including undocumented immigrants. His last budget covered undocumented immigrants under the age of 21, but Newsom has not yet proposed covering those between 21 and 65. Covering the older population is expected to cost the state $80 million annually, according to estimates released by the governor’s budget office.

Newsom, who took office after eight years under Gov. Jerry Brown (D), has continued Brown’s habit of stockpiling cash in case of an economic downturn like the one that caused multibillion-dollar budget deficits a decade ago. Newsom said his budget would add an additional $2 billion to the rainy day fund, which is projected to grow to $18 billion by the end of the budget year.

Legislators will take several months to review Newsom’s proposals and make their own changes, a process that happens largely behind closed doors. In a statement, state Senate President Pro Tem Toni Atkins (D) called Newsom’s proposals “a solid starting point,” hinting at potential negotiations ahead.