California lawmakers approved and sent Gov. Jerry Brown a $200 billion state budget on Thursday, using revenue from a rosy economy to build $16 billion in reserves and steer hundreds of millions of dollars in new funding to universities and programs for the homeless.
The budget agreement passed both houses easily despite some Republican opposition. Democratic majorities highlighted a projected $9 billion surplus as a sign of the state’s recovery since the recession a decade ago.
“This is the best position we’ve been in in years,” said Senate President Pro Tem Toni Atkins, D-San Diego.
The budget hewed fairly closely to the plan Brown presented in May, boosting reserves by billions of dollars rather than committing money to proposals that would have expanded health care and offered tax breaks to undocumented residents.
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The budget includes a $138.6 billion general fund. That's about $70 billion more than the general fund in the state's 2011-12 budget.
The new budget provides $78 billion for K-12 education, which is about $30 billion more than the state’s recession budget seven years ago.
The budget also frees up $500 million in grants that cities can use to address homelessness. It increases the value of welfare grants through the CalWORKS program, raising spending there by $360 million.
It boosts ongoing funding for the California State University system by $105 million, and provides of hundreds of millions of dollars more for it and the University of California in one-time allocations.
"We have historic investments in K-12 education, historic investments in our higher education. We now have a budget reserve that is larger than the general funds of 33 states," said Assembly Speaker Anthony Rendon, D-Lakewood. "It's an investment in our future with respect to early childhood education. It's also really helps to protect a lot of what we really love about the state, with respect to the environment and our great public schools."
Republicans warned that the budget did not make a serious dent in the state’s unfunded pension commitments, and that those debts could trigger a financial reckoning in the near future.
“We look like passengers on the Titanic,” Sen. John Moorlach, R-Costa Mesa, said.
But Democrats countered that they've carefully accumulated reserves to help the state navigate the next financial downturn.
The budget aims to "fill" the so-called Rainy Day Fund, which by law can hold a sum equivalent to 10 percent of general fund revenue. It sets aside another $2 billion for uncommitted reserves, and opens a new "safety net" reserve for social services with an initial $200 million.
"This is what we're doing to prepare ourselves for the future because a recession is an inevitability," said Assemblyman Ian Calderon, D-Whittier.
Some Republicans argued the money would be spent as a rebate to taxpayers. The savings, they asserted, help to lock in high spending that they consider to be irresponsible. "You want a blank check for the future? That’s what this is," said Assemblyman Jim Patterson, R-Fresno.
Brown favored one-time expenses, and the budget funds a number of pricey government buildings around the state, such as:
- Setting aside $1.2 billion to replace the 66-year-old building attached to the Capitol that houses legislative offices and to build a new state building on O Street that would temporarily house legislative staff. Assemblyman Kevin McCarty, D-Sacramento, called the current Capitol Annex a "death trap" because of its deficiency of safety features like sprinklers and clear emergency exit routes.
- Putting $100 million toward a California American Indian Heritage Center in West Sacramento. Tribes would be asked to raise another $100 million for the project.
- Building new courthouses around the state, including a $460 million building to replace Sacramento Superior Court. The budget also has money to build new courthouses in Modesto and Redding.
Lawmakers sparred over some of those projects, as well as a provision that commits a share of potential future surplus revenue toward rail construction. Sen. Steve Glazer, D-Orinda, and several Republican lawmakers tried to block that money from being used on the state's $77 billion high-speed rail project. A handful of lawmakers also voted against replacing the Capitol Annex.
Those efforts to change the construction plans failed, with Democratic leaders holding to the deal they struck with Brown.
"When it's all said and done, it's about the people we represent," Atkins said after the votes. "I think it is for us a time of unprecedented joy and celebration to be able to take things home to the community — that we did our best to make sure you were front and center when we considered each and every one of those items today."
Bryan Anderson and Taryn Luna of The Sacramento Bee Capitol Bureau contributed to this report.