Brown, Legislative Democrats Reach Budget Deal

California Governor Jerry Brown and Democratic legislative leaders appear to have reached a budget deal days before the legislature’s constitutional deadline.

“The Legislature is doing their job and doing it well,” the governor said in a late-night statement after the joint Senate-Assembly Budget Conference Committee wrapped up its work Monday.  “It looks like California will get another balanced budget and, very importantly, educational funding that recognizes the different needs of California’s students.”

The new spending plan will use the more conservative revenue estimates pushed by the governor – rather than the projections from the non-partisan Legislative Analyst’s Office, which has said it expects the state to bring in an extra $3.2 billion.  The deal also apparently calls for a $1.1 billion reserve.

“I’m prepared to accept the governor’s revenues for the purpose of getting to a deal,” Assembly Budget Chair Bob Blumenfield said at the start of the nearly four-hour conference committee hearing.  “And we’re prepared to do that because this is all about compromise and it’s all about moving the state forward.”

Yet the three sides have still found the money to fund the top priorities for new spending identified by Assembly Speaker John Pérez and Senate President pro Tem Darrell Steinberg.  Gov. Brown has consistently opposed any new spending.  That money would come from increased property tax estimates and higher expected savings from the implementation of the federal health care law.

“As all budgets are acts of compromise – this budget would be no exception … many of the things that each of our houses have agreed to and been fighting for – many – will be in the final agreement,” said Senate Budget Chair Mark Leno.  “Maybe a few not.”

According to Capitol sources, new spending areas for the upcoming fiscal year that starts July 1st include:
-       A one-time grant of $250 million in Proposition 98 funds for career technical education programs, which will be used to incentivize business participation in K-12 and community college programs.
-       $206 million for mental health care, of which $142 million is one-time funding, for rapid response help, including mobile crisis teams, stabilization beds and triage personnel.
-       $105 million to restore child care slots eliminated by previous years of budget cuts.
-       $63 million for the court system.  Legislators had wanted to put $100 million back in the courts, while Brown had not proposed giving them any additional money in his budget plans.
-       $51 million in child poverty grants for California’s welfare-to-work program, CalWORKs, with grants starting March 1st.  (This would increase to $150 million in future budgets.)  Assembly Democrats had wanted $212 million.
-       $10 million for Fiscal Year 2013/14 (increasing to $80 million in future budgets) to restore dental care for three million low income Californians.  Benefits will become available May 1, 2014, once the program is restarted from scratch. They will include preventative and restorative services, including full mouth dentures.  This is well below the $131 million called for by Senate Democrats.

“For the third year in a row, we will meet the June 15 Constitutional deadline to pass a balanced budget,” Steinberg said in a statement.  “More importantly, this plan wisely uses our resources to strengthen the foundation of California’s future.”

One of the top priorities for Assembly Democrats – the speaker’s “Middle Class Scholarship” program for California college students – will be funded up to $300 million once it's fully implemented in four years, but will be phased in starting in Fall 2014.

One of the biggest areas of disagreement has been Gov. Brown’s proposed overhaul of the formula that sends money to California school districts.  Both the governor and lawmakers agreed school districts should have more control over how they spend their money. But they disagreed about whether schools with a majority of English language learners and low-income students would receive additional money.

It now appears that they will: The budget compromise would spread 84 percent of all school funds equally among all districts.  The remaining money would be spread among districts with high concentrations of English language learners and low-income students.  By reducing the repayments on what Brown has termed the “wall of debt” facing the state from previous budgets, the deal would ensure that all school districts receive funding increases.