California Lawmakers Pass Largest-Ever Budget

SACRAMENTO, Calif. (CN) – Both houses of the California Legislature agreed Thursday to a $183 billion budget deal to fund the state through July 2018, the largest spending plan in state history.

A sometimes contentious debate eventually produced an agreement that lands on Gov. Jerry Brown’s desk for signature before the end of the fiscal year, July 1. The $183 billion budget includes bonds and loans.

The budget allocates a spending increase of $3.2 billion to education over last year’s totals. In all, $74.5 billion will be spent on K-12 and community colleges, or about $11,000 per student.  Lawmakers also extended a program that allows parents’ choice of school districts for another five years.

Assembly Budget Subcommittee on Education Finance Chair Kevin McCarty, D-Sacramento, praised the budget’s commitment to education.

“As Chair, I have worked diligently for the past six months with the Legislature, the Governor and the public to make critical investments in early education, K-12 education and higher education,” McCarty said in a statement.

While the amount spent on education is staggering, it pales in comparison to the expenditures agreed upon to cover health care costs, as more than $105 billion will go toward Medi-Cal programs. Medi-Cal is intended to provide medical and dental coverage for low income Californians, but currently about one in three residents are registered to receive care through the state funded program.

“This is an example of California continuing to lead in helping to provide health care to all,” Senate Budget Chair Holly Mitchell, D-Los Angeles, said in a statement. “This budget has something for everybody and provides a balanced perspective to areas important to Californians.”

A significant chunk of the funds, more than $1 billion, comes from Proposition 56, which increased taxes on tobacco products. Heated debate centered on how this money would be distributed, with many lawmakers seeking to increase payments to physicians and dentists, as the law intended.

Gov. Brown has proposed using the additional revenue to offset rapidly rising health care costs within the Medi-Cal program. Ultimately, the Legislature agreed to spend $465 million to increase payments and the remainder will fund Medi-Cal programs.

Assemblyman Rob Bonta, D-Alameda, said he was “proud to deliver an on-time, balanced budget that invests in our people and reflects responsible spending aligned with our California values,” via Twitter shortly after the State Assembly adjourned.

Approximately 1 million more California residents will qualify for the earned-income tax credit next year, up from about 400,000 last year. The credit has been shown to be particularly beneficial to the working poor.

California’s roads and bridges will also get significant funds from new taxes and fees. Budget analysts estimate that the unpopular gas tax, passed in April, will contribute $2.8 billion, with about $1.7 billion going to local roads, streets and public transportation projects. About $111 million in bond funds approved in 2014 will be spent on flood control programs.

“The needs of Central California have long been overlooked,” Sen. Anthony Cannella, R-Ceres, said in a statement. “Although this budget has many faults, the transportation component will bring much-needed infrastructure improvements and jobs to my district.”

Cannella also praised financing of Medi-Cal programs, which are highly important to rural constituents in the central valley.

Other notable expenditures include the approval of $3 million to fund drugged-driving programs, including law enforcement education and the purchase of new equipment to prepare the state for legalized marijuana in 2018.

The Legislature also voted to limit the number of beds in immigration detention centers as a means to resist the federal government’s current push to deport illegal aliens with criminal histories.

The Rainy Day Fund, the state’s emergency back-up account, will receive $1.8 billion, bringing the total account balance up to $8.5 billion.

Two measures that received condemnation from Republicans in both houses also passed.

One is a change in election rules to allow Democrats additional time to address a recall election against a Los Angeles-area Democrat. Recently, proponents collected the required 31,000 signatures to move forward with the recall against Sen. Josh Newman, D-Los Angeles, largely for his support of the gas tax hike.

Assemblyman Rocky Chavez, R-Oceanside, said the budget debate was the wrong place for election rules changes.

“Recall needs to be a separate discussion,” Chavez said. “Don’t blend the issues of veterans and cemeteries with political efforts.”

The other functional change essentially guts the Board of Equalization, moving operation of the collection and taxpayer protection board from elected control to the governor’s office.

The Legislature cannot completely eliminate the board, as some of its duties are prescribed in the constitution, most notably, the fair and equal collection of property taxes.

Board of Equalization member George Runner said the gutting is “a last minute budget power grab.”

Some Democrats expressed dissatisfaction with the move as well.

“In an attempt to rush drastic changes in must-pass legislation, the administration missed an opportunity to engage thorough public process,” said Assemblyman Sebastian Ridley-Thomas, D-Los Angeles.

“Taxpayers, local governments, employee organizations, and the fourth estate deserve better from the state of California,” he added.

Thomas had proposed leaving the board intact, albeit with tighter oversight by lawmakers.

Gov. Brown will have an opportunity to review the budget deal over the next few weeks, along with the power to reduce appropriations spending, known as “blue penciling.”

This will be the sixth fiscal year in a row the budget has been completed on time after being consistently late from 1987 to 2010. Voters approved Proposition 25 in 2010 to ensure the budget was completed on time, or legislators would be required to forfeit their pay. That year, the budget proposal was delayed until October.

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