California Money

By Jim Miller
Published: Monday, Jun. 9, 2014 – 12:00 am
Last Modified: Monday, Jun. 9, 2014 – 6:13 am

With less than a week before the constitutional deadline to pass a budget, the Democrats in control at the California Capitol are at odds on the big questions: how much money the state will take in, how it should be spent, and how major programs should be structured.

Gov. Jerry Brown, seeking re-election to a historic fourth term this fall, has emphasized debt reduction and prudence even as the economic forecast improves. Lawmakers, meanwhile, are seeking higher spending in many areas. Spending plans adopted by Assembly and Senate budget committees reflect revenue estimates by the nonpartisan Legislative Analyst’s Office that are $2.5 billion higher through June 2015 than the governor’s.

Lawmakers have proposed hundreds of millions in spending above the governor’s plan while questioning whether the administration has inflated some costs. Assembly and Senate plans accept the analyst’s view that the administration overstates Obamacare-driven growth in Medi-Cal caseloads by some $300 million.

The two houses also have parted ways from the administration on some major policy issues, such as school funding and the use of hundreds of millions of dollars from cap-and-trade auctions meant to reduce heat-trapping emissions. Brown wants to spend more of the money on planning and building the high-speed rail system that he has championed.

Last week, the Senate presented a plan that instead emphasizes targeting the revenue toward better urban planning and helping low-income communities hurt by pollution. The Assembly approach would create a grant program to reduce greenhouse gases.

Just how deep the intraparty rift runs, however, remains to be seen. With lawmakers now required to lose pay if a budget is not passed by June 15, lawmakers and administration officials have downplayed the prospect of any deal-breakers that would prevent an on-time spending package or prompt Brown’s veto.

Negotiations on a new budget take place with the state’s fiscal outlook the best it has been in years, thanks to an improving economy and voters’ approval of temporary tax hikes two years ago. Last month, Brown and legislative leaders announced an agreement on a rainy-day reserve constitutional amendment that passed overwhelmingly.

The governor and legislative leaders have met privately in recent days.

“Our intent is to complete our work by Friday,” said state Sen. Mark Leno, D-San Francisco, chairman of the Senate’s budget panel.

Assemblywoman Nancy Skinner, D-Berkeley, who leads the Legislature’s budget-writing committee that began meeting last week, said lawmakers have embraced the governor’s proposals to pay down some debt and put the reserve proposal before voters.

The issue now, said Skinner, “is what level of expenditures that aren’t in the governor’s budget are also fiscally responsible?”

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