LOS ANGELES — California lawmakers broke their tradition of going down to the wire on budget passage by reaching an agreement on a $199.6 billion spending plan Thursday evening.
A rosy economy and an estimated $9 billion surplus by the most conservative estimates resulted in swift passage of the budget through both houses despite some opposition from the Republican minorities.
A constitutional change that allowed budget passage by simple majority, rather than the previous two-thirds supermajority, has enabled the state to pass a budget on time the past six years.
Typically that has meant a budget has passed near midnight on the July 15 deadline, but even that represented a vast improvement over prior years.
Gov. Jerry Brown, who has made efforts to prepare for volatility in state revenues a rallying cry during his nearly eight years in office, convinced lawmakers to set aside $15.9 billion in total reserves, the maximum allowed under the state constitution. All but $2 billion of that goes into the rainy-day fund, which can only be spent during a budget emergency caused by a natural disaster or shrinking revenues. The total also includes $200 million to create a new safety net reserve for CalWorks, the state’s public assistance program.
“This budget strikes an appropriate balance that strengthens our state’s fiscal stability with an unprecedented level of reserves, while prioritizing investments that will address the pressing needs of this state,” said Senator Holly J. Mitchell, D-Los Angeles.
Democrats wanted a significant chunk of the surplus to go for homeless shelters and to build housing for very poor people – and they got that.
The budget agreement included an additional $250 million in one-time emergency aid to local governments to reduce homelessness for $500 million total. It also provides $109 million in ongoing funds for homelessness and $300 million per year for three years beginning in 2019-20 for affordable-housing construction.
“This budget fully funds K-12 and provides $3.6 billion for the neediest schools to provide more resources for their students,” said Sen. Jim Beall, D-San Jose. “We have expanded childcare for the working poor, increased funding for mental health services, and made available a half-billion dollars for local governments to combat homelessness.”
K-14 school funding grew to $78.4 billion in Proposition 98 funding – a 66% increase since 2011-2012. Lawmakers also approved a $3.6 billion increase in the Local Control Funding Formula, which is more than $1 billion above the Jan. 10 proposed budget, and $300 million in one-time money for low-performing students. California State Universities received an additional $260 million while the University of California system got a $210 million increase to prevent tuition increases.
Lawmakers also approved spending $5 billion in Senate Bill 1 transportation funds – money being challenged by an initiative to repeal last year's gas tax legislation. The budget also included $300 million to tackle deferred maintenance for levees, courthouses, and the two university systems.
"For the first time in years, the state and cities are making progress in maintaining and repairing our aging roads, tunnels and bridges, thanks to Senate Bill 1," said Beall, the legislation's author.
They also approved $700 million to rebuild the state Capitol annex. A proposal to expand Medi-Cal health care coverage for immigrants was scrapped.
The Senate Republican caucus decried the 9% increase in spending over last year’s budget.
“While we applaud the governor and the Senate President pro Tem for increasing the rainy day fund, we should also be wary of future economic downturns and pay down more of the massive pension and health debts,” said a joint statement by Senate Republican Leader Patricia Bates, R-Laguna Niguel; Sen. Jim Nielsen, R-Tehama, vice chair of the Senate Budget and Fiscal Review Committee and budget conferee; and Senator John Moorlach, R-Costa Mesa, member of the Senate Budget and Fiscal Review Committee.
In testimony following budget passage, Moorlach called the budget half-baked, saying it will create a fiscal reckoning for future lawmakers.
“When you have a bumper crop you need to set aside money and pay down the credit card balances,” Moorlach said.
Brown has until July 1 to sign the budget.