Friday, June 19, 2015

GOOD NEWS BUDGET DEAL HAS EVERYONE HAPPY – if ‘everyone’ is limited to the Governor, the Speaker and the President pro tempore

by Kimberly Beltran | SI&A Cabinet Report  |

June 17, 2015  ::  (Calif.) Gov. Jerry Brown agreed to a budget deal Tuesday with legislative leaders that holds spending much closer to his May proposal but increases spending slightly for a few priority programs, including preschool and child care.

The $115.4 billion spending plan includes no additional funding for K-14 education over the $14.3 billion increase already provided in the governor’s earlier budget plan. That increase, which puts total education spending at nearly $70 billion, comes courtesy of the state’s constitutional funding law that directs nearly half of all new revenue to schools.

“In this budget we’re helping low-income working Californians with an income tax credit; we’re spending billions in our schools and spending it in a way that helps those kids and those families that come from the most difficult circumstances, and we also pay down our debts and we build up our rainy day fund,” Brown said during a Capitol press conference announcing the deal.

“This a sound and well-thought out budget, yet our work never ends,” said the governor, who also called two special legislative sessions to address California’s failing transportation infrastructure as well as impending budgetary problems with the state’s core health program – Medi-Cal.

While Republicans applauded Brown for rejecting the higher-spending called for in the budget approved Monday by the Legislature, Democrats, too, said they were pleased with the final outcome.

“This is not a return to the bad old days of spending beyond our means,” said Assembly Speaker Toni Atkins, D-San Diego. “This budget builds total reserves by over $4.6 billion and it pays down $1.9 billion in budgetary debt.”

The budget accord reached this week is based on revenue estimates from the governor’s Department of Finance, much more conservative than those from the Legislative Analyst’s Office which predicts some $3 billion more in state income for the year.

Still, negotiations revealed that some additional spending could be justified by “redirecting some spending and using identified savings, including a reform of the Middle Class Scholarship program, and correcting an error in the estimate for Medi-Cal payments,” finance staff said.

The adjustments will be used to provide:

  •        $40 million to expand Medi-Cal to cover all low-income children, regardless of immigration status, effective May 1, 2016 ($132 million when fully implemented)
  •       $265 million to fund 7,000 additional preschool slots and 6,800 child care slots, plus a rate increase for all providers
  •         $97 million over the January budget for the California State University to expand enrollment and focus on increased success.
  •      $226 million on a one-time basis to restore the 7 percent reduction in service hours for In-Home Supportive Services
  •     $500 million (Proposition 98) for a one-time teacher effectiveness block grant

Crediting Brown, Atkins called the inclusion of a new earned income tax credit “probably the single biggest new state anti-poverty program created in recent memory,” saying, “It will make a real difference in the lives of working Californians.”

“Other than the budget this body approved Monday, this is the best budget that we have seen in years,” the speaker said.

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