California budget: Big surplus, big differences

In summary

Beating Wednesday’s deadline, Democratic lawmakers pushed through a plan to spend California’s record budget surplus, but key negotiations remain with Governor Newsom. There are major differences on gas tax relief, education, mental health and more.



California lawmakers today approved a $300 billion state budget, but it’s far from final as legislative leaders continue to negotiate with Governor Gavin Newsom on issues including a proposed rebate. billions of dollars to taxpayers.

The legislature passed the record spending plan anyway, to meet a constitutional requirement that MPs must pass a balanced budget by Wednesday or forfeit their salaries. The bill will be sent this week to Newsom, who then has 12 days to sign it or veto it – another critical deadline that should propel the two sides towards an agreement.

The start of the next fiscal year is looming on July 1, in less than three weeks. Still, the budget process will likely stretch well beyond that date as lawmakers pass follow-on measures changing the provisions of their spending plan to reflect compromises with the governor. That’s what happened last year, when Newsom and legislative leaders announced a deal in late June and continued to put the finishing touches on it in August.

Newsom and the Democratic-controlled Legislature share general values ​​for state spending, and their budget proposals have broadly similar frameworks. But with an unprecedented amount of cash at their disposal – a surprisingly strong recovery from the coronavirus pandemic, particularly among the wealthiest Californians, has produced a discretionary surplus of nearly $49 billion, officials estimate. ‘State – they still have to agree on many details.

State Sen. Nancy Skinner, a Democrat from Berkeley who leads the Senate Budget Committee, said the Legislature agreed more than 95% with Newsom and she expects them to come to a conclusion soon. consensus.

“I like these kind of negotiations,” she said in an interview. “Our prospects are so aligned that we are in good shape.”

The budget bill approved by the Legislative Assembly today includes approximately $236 billion in general fund spending, with the rest coming from special funds. It would increase state budget reserves to nearly $38 billion, increase pay rates for state-subsidized child care providers, and expand eligibility for Medi-Cal, the child care program. state health insurance for the poor, to all adults, regardless of immigration status, by the start. of 2024.

Under the legislative plan, California would spend $1.7 billion over the next few years to bolster its health care and human services workforce, as well as $100 million to develop generic insulin. and $100 million to establish trust funds for low-income children who have lost their parents. or caregivers to COVID-19.

Anticipating a U.S. Supreme Court ruling as early as this month that would overturn constitutional abortion rights protections and potentially bring a wave of women to California for care, state leaders want to dramatically expand the access to abortion. The budget would provide more than $130 million to train more providers, improve clinic infrastructure and safety, reimburse providers who care for people without health coverage, and create a statewide fund to help patients pay their travel expenses.

The Legislature massively adopted the measure, by 57 votes to 16 in the Assembly and 28 to 8 in the Senate. Republicans complained that not enough of the surplus was being directed to struggling Californians and fiscal reserve accounts, especially with a possible economic downturn looming.

“As the state coffers are growing, family bank accounts are shrinking,” said Assemblyman Vince Fong, a Republican from Bakersfield, on the floor of the Assembly. “California people are rightly frustrated. They pay more and receive less. Government spending continues to rise, but the problems are getting worse and the crises are unresolved.

Learn more about the lawmakers mentioned in this story

State Assembly, District 34 (Bakersfield)

How he voted 2019-2020

Liberal
Conservative

District 34 Demographics

Race/Ethnicity

latin

38%

White

48%

Asian

6%

Black

5%

Multi-race

3%

Voting register

Dem

28%

G.O.P.

44%

no party

21%

Other

6%

Campaign Contributions

Asm. Vince Fong took at least
$473,000
from Finance, insurance and real estate
sector since he was elected to the Legislative Assembly. This represents
14%
of his total campaign contributions.

State Senate, District 9 (Oakland)

How she voted 2019-2020

Liberal
Conservative

District 9 Demographics

Race/Ethnicity

latin

26%

White

32%

Asian

21%

Black

16%

Multi-race

5%

Voting register

Dem

68%

G.O.P.

6%

no party

22%

Other

4%

Campaign Contributions

Senator Nancy Skinner took at least
$1.6 million
from Work
sector since being elected to the Legislative Assembly. This represents
26%
of his total campaign contributions.

The biggest remaining dispute between Newsom and legislative leaders is over competing proposals to relieve Californians from soaring gas prices and inflation. The governor has pushed to send every registered vehicle owner in the state a $400 debit card — up to two per person — at a cost of about $9 billion.

But Democratic lawmakers want to focus the rebate on low- and middle-income families earning less than $250,000 for a couple or $125,000 for an individual. Their plan would reduce checks by $200 for each eligible taxpayer and their dependents, up to $800 for a household, at a cost of about $8 billion.

The two sides agreed on a $21 billion climate package, but have yet to work out how exactly that money should be split between drought relief, wildfire preparedness, zero-vehicle incentives emission, clear energy development and other programs.

Other lingering disagreements center on higher levels of new spending proposed in the Legislature’s budget compared to the governor’s plan. During a Senate budget hearing last week, Erika Li, deputy budget director at Newsom’s Department of Finance, voiced her opposition to the billions of dollars in ongoing additional spending that lawmakers are seeking for universities, housing and social protection programs.

“Given the uncertainty in the economy and rising inflation, we are concerned that the Legislature’s budget will commit an unsustainable amount to current expenditures,” Li said.

These legislative proposals include increasing the state working income tax credit, a tool to return money to low-income working parents, to at least $255 starting in 2023. The change would cost at least $400 million a year.

Lawmakers want to increase base funding for the University of California and California State University by $150 million more than Newsom and pour hundreds of millions more in financial aid, expanding the assists approximately 150,000 newly eligible students. They would also spend an additional $2 billion on student housing projects over the next three years.

The Legislature is pushing to create a new homeownership assistance program, setting aside $1 billion a year for the next decade to subsidize down payments for first-time buyers, who would eventually pay the money back into a loan fund autonomous. Newsom did not endorse that idea, nor the billions of dollars in additional funding lawmakers have proposed for affordable housing development and homeless services.

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