SACRAMENTO, Calif. — Gov. Gavin Newsom said Wednesday that he will withhold $2.5 billion in the upcoming state budget to penalize counties that fail to comply with state mandates on wearing masks, testing and other measures meant to slow the spread of COVID-19 cases and decrease hospitalizations.

The money is intended to help local governments pay for services needed because of the pandemic. But it’s contingent upon counties following emergency orders to enforce the safety measures as they gradually reopen the economy.

Newsom’s warning came as the state recorded a 69% increase in new cases just this week, and set several daily records for new cases. Officials reported corresponding increases in the rate of people testing positive and hospitalizations.

The Democratic governor said he views the $2.5 billion fund in the budget that lawmakers are expected to approve this week as a reward, not a punishment for local government.