Capitol Alert

California budget panel approves spending plan as talks with Brown continue

The Legislature’s budget-writing committee approved a spending plan late Thursday that expands a tax credit for the poor and imposes direct budget control of the University of California’s office of the president, as talks continue on how to spend more than a billion dollars in tobacco-tax money.

Thursday’s package reflects more than the $180 billion in general and special fund spending contained in the revised budget Gov. Jerry Brown released last month, with the exact amount still being calculated.

The plan includes $111 million for flood-control projects and $6 million for dam safety. That is down from the $387 million package the administration proposed in February, shortly after the spillway crisis at Oroville Dam.. None of the money, though, is for repair work at Oroville, part of the State Water Project that is off-budget.

The bill also authorizes borrowing up to $6 billion from a state investment account to make an extra payment to CalPERS to reduce the state’s pension obligations. In addition, it maintains the Middle Class Scholarship Act, a program that emerged several years ago and championed by then-Assembly Speaker John A. Pérez.

The panel, though, sidelined $400 million in proposed spending on affordable housing programs. The current budget contains the money, yet links it lawmakers easing the local land-use approval process. That never happened.

The agreement also lacks a cost-of-living adjustment for the state portion of SSI/SSP grants for the blind, elderly and disabled as well as CalWorks payments. Those would have taken effect in 2021.

Yet advocates for the poor scored a significant win Thursday, with the budget committee expanding the state earned income tax credit to the self-employed and raising the income threshold to $22,360. The current credit is available to those making up to $6,580 if they are childless, and up to $13,870 if there are two or more qualifying children. The credits have averaged about $524.

Acting on the findings of a recent state audit castigating UC’s leadership, meanwhile, Thursday’s agreement will pay for the University of California Office of the President out of the general fund. The $296.4 million will replace assessments the office now collects on individual campuses, a situation that the Bureau of State Audits found had contributed to the university’s need fr increase tuition.

Medi-Cal and Proposition 56 money are a key remaining sticking point.

The Democratic governor wants the $1.3 billion to flow into Medi-Cal’s overall budget. Lawmakers, echoing Proposition 56 proponents, want several hundred million dollars to go to raising provider reimbursement rates, which advocates contend would improve patient access.

“I think it was very important for all of us to agree to support the will of the voters,” Assemblyman Phil Ting, D-San Francisco, the chairman of the Assembly Budget Committee, told reporters earlier Thursday.

In Thursday’s votes, the panel approved general fund money – not Proposition 56 revenue – to restore optional dental and optical services.

Republicans criticized the panel’s decision as violating the spirit of Proposition 56. “Dems failed to keep promise to voters & use Prop 56 to fix our broken DentiCal & MediCal system. Disappointing 5 mil kids need dental care,” Assembly Republican Leader Chad Mayes, R-Yucca Valley, tweeted.

Earlier Thursday there were conflicting accounts of the status of budget talks. Ting said there was a tentative deal, but the Senate declined to comment and during the lunch hour Nancy McFadden, a top adviser to Brown, posted on Twitter: “I can confirm No budget deal yet. And I should know.”

Editor’s note: This post was updated at 11:25 a.m. June 9, 2017 to clarify the flood protection and dam safety allocations.