Home Uncategorized Newsom and lawmakers reach an agreement on a budget of $ 262.6 billion

Newsom and lawmakers reach an agreement on a budget of $ 262.6 billion

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Governor Gavin Newsom and Democratic leaders in the California Legislature reached an agreement Friday on a $ 262.6 billion state budget, doling out a huge windfall of tax revenue for public schools, relief from the COVID-pandemic. 19 and a radical effort to address homelessness.

The compromise, reached less than a week before the state’s new fiscal year begins on July 1, came after 11 days of bargaining among the state’s top Democrats, negotiations that began after lawmakers approved a budget of placeholder that met the constitutional deadline for action and avoided confiscation. of a portion of their wages.

But members of the legislative staff stressed that Friday’s announcement was not a final budget and said some issues remain unfinished. The governor’s office did not comment on the agreement.

Observers said conversations often bogged down in disagreements over how much new spending the state can afford in the near future. Legislative leaders said Thursday they had urged Newsom to agree to further expansion of child care services for working families.

Assembly Speaker Anthony Rendon (D-Lakewood) said child care was the last big issue in negotiations between the Legislature and the governor.

“For me, this is very important,” Rendon said Thursday. “It’s the number one priority for the Senate, the number one priority for us, and it has been for some time.”

The agreement adds 200,000 spaces in child care programs across the state over the next four years, and lawmakers also expect provider rates to increase for subsidized child care. An additional $ 1 billion will be spent on early childhood education services.

Newsom resisted the Legislature’s efforts to budget with far higher tax revenue predictions than the spending plan he proposed last month.

“It’s a question of where we land,” the governor told reporters in Oakland last week when describing the revenue estimates. “Because the concern is only, and it is a respectful concern, where are things in recent years? And while we enjoy a record surplus, unprecedented in American history … we realize that in two or three years it could be in a totally different place. “

A key victory for the Legislature was the expansion of Medi-Cal, the state’s health care program for low-income residents, to anyone over the age of 50, regardless of immigration status. Newsom wanted to limit access to people over 60.

The budget will also dedicate $ 12 billion of state cash surplus and federal pandemic relief dollars to address homelessness in California over the next two years. The plan, which did not attract significant opposition, expands efforts started last year to convert old motels and hotels into long-term housing, while providing more money for a variety of health and human services programs.

The budget projects a total tax profit of about $ 76 billion, a staggering amount of windfall cash that nearly equaled all general fund expenses just two decades ago. The high-income people who provide the bulk of California’s tax revenue were largely immune to the economic effects of the pandemic, surprising state officials who last year braced for a staggering deficit caused by the closures. unprecedented from small and large companies.

Newsom and Legislative Democrats agreed to invest heavily to help those who suffered the most, including $ 5.2 billion to cover unpaid rent and $ 2 billion to cover water and electric bills owed by distressed Californians.

Also included in the budget is the Governor’s sponsored effort to provide $ 8 billion in tax refunds to Californians with adjusted incomes of $ 75,000 or less – one-time payments of between $ 500 and $ 1,100 billed as a second round of checks. of “Golden State stimulus” after those sent to low-income residents in the spring.

But the Legislature came up with a new and potentially controversial way to account for those cash allocations.

Newsom’s advisers said the payments were the result of the state violating a spending limit imposed by voters in 1979, prompting a tax refund and an $ 8 billion payment to schools. Lawmakers, however, chose to count the refund as a simple tax cut and not provide additional dollars for education, insisting that the state avoid going over the spending limit by excluding billions of dollars in annual public safety payments. to the counties. That, in theory, would allow ample growth in state spending in the coming years.

Several other legislative priorities appear in the plan, including $ 4 billion for small businesses affected during the pandemic, using about $ 1.5 billion in state grants.

The agreement also responds to Newsom’s call for an additional year of education, known as transitional kindergarten, for all 4-year-olds, although the full program will not be implemented for another four years.

Final legislative votes on the main components of the budget plan are expected Monday, given the constitutional mandate that all bills be in print for at least 72 hours before a final vote.

Several budget-related bills are also expected to be ratified in the coming days, including a closely watched effort to speed up the schedule for holding a statewide election in which voters can remove Newsom from office.

Passage of the primary budget bills will ensure that the California government begins the new fiscal year with a spending plan in place, continuing a streak of one-off actions dating back to 2011, the first year after voters cut back legislative threshold to approve the budget.

Times writer Taryn Luna contributed to this report.

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