CA budget deal reached, legislators to vote Monday

On Thursday, the California Senate Committee on Budget and Fiscal Review released an overview of the budget adopted by the Conference Committee on June 9. The Conference Committee is composed of both Senate and Assembly members, tasked with negotiating multiple conference actions from June 1 – 9.

According to the overview, the conference version of the budget “carefully balances the need for additional public investment in child care, education, health care and other programs, with the necessity of maintaining the state’s fiscal stability through increased reserves and debt reduction.” These priorities include actions that will:

• “Benefit educational programs from pre-school through college, through:
  • “Investments of significant resources in early childhood education that will expand capacity, increase rates for services, and ensure a sound budgetary footing for the childcare program.
  • “Increased resources for K-12 education directed to the implementation of the Local Control Funding Formula, and more funds for educator training and adult education.
  • “Additional resources and improvements for the state’s higher education programs and segments by adopting greater support services, increasing enrollment slots for California residents, and CalGrant expansions.
• “Improve California’s health care system by increasing Medi-Cal provider rates, restoring most optional Medi-Cal benefits, and adding funding for specific specialized programs.
• “Provide resources for a new state Earned Income Tax Credit, consistent with the governor’s plan, which will provide a limited refundable tax credit for very low-income, wage-earning families.”

As detailed above, the Legislature’s version of the budget allocates total General Fund expenditures of $117.5 billion for 2015-16, which is about $2.2 billion more than Governor Jerry Brown’s May Revise. The budget includes total reserves of $5.7 billion, which includes $4.2 billion in the Prop. 2 “rainy day fund” and $1.5 billion in the regular budget reserve.

According to a prepared statement from the Assembly Democratic Caucus, the conference version of the budget “adds another $700 million over what the governor proposed for schools”:

• “Increases Prop. 98 funding for 2015-16 by $8.2 billion more than was provided in 2014-15 budget.
• “Expands Early Education funding by an ongoing amount of $577 million. In the budget year, the total cost will be $409 million, this includes:
  • “$148 million for preschool and quality rating activities within Proposition 98.
  • “$261 million for child care and preschool programs outside of Prop. 98.”

California community colleges and state universities will also receive increased funding:

• “Increases funding for the CSU by $107 million, an increase of $70 million over the May Revision. This increase will grow to about $150 million over the next few years, allowing CSU to increase enrollment and speed graduation times.
• “Provides $25 million increase for the UC, but makes the funds contingent upon UC increasing enrollment of California students by 5,000 over the next two years, capping enrollments of out of state students and only using state financial aid for in state students.
• “Increases the Cal Grant B stipend by $150, increases the number of Competitive Cal Grants awards by 16,000, eliminates the planned cut to Cal Grants for non-profit colleges, and funds the Middle Class Scholarship to cut tuition by 20 percent for CSU and UC students in the 2015-16 year.
• “Provides major increase for Community Colleges including a $38 million Cal Grant B increase for Community College Students.”

Regarding health care, the new budget will restore 5 percent of the “AB97 Medi-Cal rates cut for dental care immediately and the rest of Medi-Cal services on April 1, 2016.” In addition, funding has been allocated toward Medi-Cal services for children, regardless of immigration status. Previously optional Medi-Cal benefits have been restored, and Developmental Disability Services rates are increased by 5 percent for targeted services and 2.5 percent for all other services.

Senate President pro Tempore Kevin de León, D-Los Angeles, said in a prepared statement:

“Our legislative budget is on time, balanced, and great news for schools. Our budget includes $5.7 billion in reserves, about $1 billion more than the governor’s May Revision reserves, and an additional $760 million in debt payment, along with targeted investments to ensure economic growth and the well-being of our residents. This budget increases access to higher education for California students, adds childcare options for working families, creates an earned-income tax credit for working people, and provides help for Californians dealing with the drought.”

Despite the fanfare, Senate Republican Leader Bob Huff, R-San Dimas, urged caution in a release earlier this week:

“This budget deal negotiated by the legislative Democrats uses revenues projections that are higher than the governor’s May revenue projection by $3.2 billion. This is a risky move. I am afraid legislative Democrats want to spend money that may not exist and that once again will push our state into budget deficits down the road.

 

“Senate Republicans continue to press for a responsible, balanced budget. However, the ball is in the hands of the majority party in the Legislature, the Democrats. They can join the governor and Senate Republicans to continue to rebuild the Golden State’s financial health or they can continue to spend money we do not have, which ultimately would put our state financial outlook at risk.”

Both houses will vote on legislation reflecting the committee’s decisions, Senate Bill 69 and Assembly Bill 93, on Monday, June 15.