California Sen. Kevin de Leon called lawmakers budget agreement one for all Californians, but minority Republicans disagreed.
Senate President pro Tem Kevin de Leon, D-Los Angeles, hailed the state budget agreement.

LOS ANGELES —California's legislature will vote Wednesday on a $169.3 billion state budget compromise reached by legislative leaders June 9.

The Budget Conference Committee hammered out an agreement in principle on June 9, but the full Assembly and Senate will vote on the final budget on Wednesday.

The hearing followed several days of closed-door meetings between Gov. Jerry Brown, Senate President pro Tem Kevin de Leon, D-Los Angeles, and Assembly Speaker Anthony Rendon, D-Lakewood, according to the California League of Cities, which put out a release on the budget talks.

The conference report "reflects many of the Legislature's top priorities, including reducing poverty, restoring funding for schools and early childhood education, making college more accessible and affordable for California students, increasing the availability of affordable housing, and protecting California's fiscal future by building up our budget reserves," de Leon said in a statement.

"The budget agreement also includes many elements of the Governor's May Budget Revision, and we look forward to working with him to finalize another balanced, on time budget by June 15," de Leon said.

Sen. John Moorlach cautioned legislators against adding on trailer bills in the final hours before the budget agreement is reached.

"I'm thankful that Governor Brown has worked to model out a softening economy and a budget agreement that grants a $2 billion increase for the rainy day fund; however, we still have much work to do to constrain spending and address our ever increasing debts and liabilities," the Orange County Republican Moorlach said in a release. "This constraint needs to include strong oversight over the dozens of trailer bills likely to be passed between now and the end of the fiscal year."

Final budget language is expected to be released today and tomorrow in preparation for the final vote.

"In order to continue to give this process legitimacy," Moorlach said, "trailer bills need to stay consistent with established budget priorities as to not exacerbate fiscal problems in the future."

De Le-n was successful with his plan to build housing for the homeless by allowing some Proposition 63 mental health funds, paid for with a decade-old tax on incomes above $1 million, to be used to secure a $2 billion revenue bond.

While the agreement includes priorities of the governor and Legislature, it also delays action on some big items.

The Budget Committee approved the governor's objective of adding $2 billion to the state's rainy day reserve to protect the state in the event of an economic downturn. The California recovery is considered by many to be long in the tooth. Legislature also agreed to limit new and ongoing spending.

"Overall, the budget agreement holds good news for cities," according to the League of Cities. "However, several of the items on which the Legislature delayed action will require continued vigilance."

The budget agreement does not include the Governor's plans to allow by-right development of affordable housing. Talks continue on what opponents describe as Brown's proposal to limit community involvement, design and environmental review on affordable housing projects, though supporters say it is an effort to reduce spurious "not in my backyard" challenges that unnecessarily delay sorely needed housing development.

The Governor has offered $400 million in one-time funds for affordable housing in exchange for the Legislature approving the "by right" proposal. The Budget Conference Committee approved placeholder language that sets aside the $400 million while discussions continue.

State legislators and several cities have launched proposals aimed at solving the state's affordable housing crisis and homeless problems over the past several months – many of which involve issuing general obligation bonds and tax increases.

The League does not support the governor's by-right proposal, which it characterized as sacrificing public input, environmental analysis and local control on important development projects statewide, and said "trading it for a one-time $400 million appropriation would be ridiculous."

The state lost $1 billion in annual funding for affordable housing when it eliminated redevelopment several years ago. The proceeds of the last housing bond, which passed 10 years ago, have been depleted.

According to the League, the federal government also has been lowering the amount it contributes to housing since the 1980s.

"This massive withdrawal of resources has contributed to our current challenges, yet no significant source of ongoing affordable housing funding is on the horizon," according to the League.

The League recommended instead offering incentives to help local communities struggling to accommodate higher densities and new development.

While $400 million may sound to some like significant funding, it would only result in the equivalent of approximately 2,000 housing units statewide, the League said. Moreover, many jurisdictions would not even benefit from the allocation, even though they would be required to implement the "by right" proposal.

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