California lawmakers reach agreement on budget's broad brushstrokes

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California Gov. Gavin Newsom and Democratic legislative leaders reached a broad budget agreement Sunday that scrapped the governor’s proposal for a drinking water tax and expands healthcare for people in the country illegally.

"I appreciate the hard work of Budget Committee chairs Sen. Holly Mitchell and Assembly member Phil Ting and all the members of the Conference Committee to develop and adopt a budget framework that is structurally balanced and invests in a California for All,” Gov. Gavin Newsom said in a statement.

The budget conference committee reached a broad-strokes budget agreement, but the entire Legislature is expected to vote Friday on the $214 billion proposed budget ahead of the June 15 deadline.

California Assembly Speaker Anthony Rendon, D-Paramount, called the budget “one of the best budgets in history,” because it maintains needed reserves and expands critical programs for California residents.

Newsom had proposed a $140 million tax on residential, commercial and agricultural water users to help provide a reliable source of clean drinking water. He scrapped his water tax proposal amid criticism from Senate Democrats, whose constituents were opposed to the tax on water bills with the state projecting a $21 billion surplus.

The compromise would use $133.4 million primarily from the state’s greenhouse gas emission credits in the state’s cap-and-trade program to fund clean water projects.

Talks stand in stark contrast to recent years during which transportation has been a primary topic.

The budget contains more than $2 billion for housing and homelessness including $500 million to build roads, water and sewer for infill development and $650 million in support to local governments for emergency homelessness programs.

It also extends Medi-Cal, the state’s subsidized medical program for low-income residents, to people in the country illegally, who are under the age of 25. The budget also brings back the fine for people, who don’t carry medical insurance that was in the original Obamacare legislation.

The Legislature did not include Newsom’s proposed tax changes that would conform part of state tax law to the 2017 federal tax bill to expand by $800 million the earned income tax credit for the working poor. His proposed changes also would have conformed with the federal tax break for opportunity zones and was expected to bring in an estimated $1 billion in additional revenues.

The Legislature pushed discussion about changes to conform to the federal tax law outside of the budget process and set a deadline to reach an agreement by July 1.

Newsom said the budget also “invests in emergency preparedness and response, provides sustainable funding for safe drinking water, and includes important funding augmentations to address the cost crisis in our state — tax cuts for small businesses and working families, expanded health care subsidies, historic funding for our schools and funding to serve more students at UC and CSU.”

The agreement reached with Senate President pro Tempore Toni Atkins, D-San Diego, and Rendon was ratified by the Legislature’s budget conference committee Sunday evening.

Atkins highlighted as budget accomplishments investments made in safe drinking water and historic levels of funding for California schools and financial assistance to California’s middle class families to pay for health care coverage in a statement.

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