Capitol Alert

California passes $215 billion budget with new spending for families, immigrants and housing

Governor Gavin Newsom talks of funding for education in his 2019-20 budget plan

Governor Gavin Newsom releases his revised 2019-20 state budget proposal in a news conference at the State Capitol.
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Governor Gavin Newsom releases his revised 2019-20 state budget proposal in a news conference at the State Capitol.

California lawmakers passed a $214.8 billion budget deal Thursday, with new spending on schools, homelessness and health care for undocumented immigrants.

The budget relies on a surplus to add billions to the state’s reserves funds, which will bring the state’s total so-called rainy day fund to $19 billion. It puts hundreds of millions of dollars into other reserves, too, including ones for schools and social services.

Lawmakers are still hashing out final details of some aspects of the budget through so-called trailer bills, which can be passed after the main budget bill. But the bill passed Thursday will provide the major framework for state spending in the next fiscal year, which starts July 1.

“The budget deal will maintain the state’s ongoing commitment to fiscal prudence,” said Sen. Holly Mitchell, a Los Angeles Democrat who leads the committee that oversees the final budget deal. “This budget is bold and responsible.”

Republicans criticized some of the spending tucked into the budget for individual projects, including dog parks and playgrounds.

“This budget has more pork in it than any other budget that I’ve seen in my time in the Legislature,” said Assemblyman Jay Obernolte, R-Hesperia, noting that many of those expenditures were added over the weekend. “Those earmarks have no business being in the budget at that late date.”

Now that lawmakers have passed it, Gov. Gavin Newsom has 12 days to sign or veto the bill. He can also nix parts of the budget through line-item vetoes.

Here’s a look at some of aspects of the budget bill passed Thursday:

Education: More money for public schools

The budget has about $101 billion for k-12 education, spending largely based on a formula in state law that dictates how much California must spend on public schools.

It has hundreds of millions of dollars to ease pension pressure on schools and it allocates more money for special education programs.

Schools will also receive $125 million for new preschool slots.

Health Care: New spending on immigrants and middle-income people

The budget includes $98 million to let undocumented young adults under age 26 enroll in Medi-Cal, the state’s health insurance program for low-income people, starting in 2020. Undocumented children up to age 19 are already eligible for Medi-Cal benefits.

Lawmakers and Newsom have also agreed to fine people who don’t buy health insurance through a penalty known as the individual mandate. Revenue from the mandate will fund insurance premium subsidies for middle income people. The budget agreement passed Thursday includes an additional $450 million over three years to fund insurance subsidies after some lawmakers argued mandate revenue alone wouldn’t make health insurance affordable.

Housing: More money to spur construction and help homeless people

Lawmakers also approved $250 million to help cities and counties plan for new housing, and half a billion dollars each for developer loans to build affordable housing and expanding the state’s Low-Income Housing Tax Credit program.

The bill also includes $650 million for local governments to help homeless people, as well as other spending intended to help that population.

Drinking water: More funding, but no new tax

The budget also appropriates $130 million to clean up drinking water in some parts of the state. The money comes from a fund intended to reduce greenhouse gases, but the Newsom administration argues that a lack of clean drinking water causes carbon emissions because it requires transporting bottled water to those communities.

The administration had initially pushed for a new tax to fund clean drinking water, but that plan was abandoned in the compromise.

Still to come

Over the next week, lawmakers will continue to vote on bills that would finalize the details of the budget, including legislation to enact a new fee on telephone bills to upgrade the state’s 911 system and to expand paid the state’s paid family leave program.

Lawmakers are also still negotiating how to fund an $800 million expansion of a state tax credit for low-income families. Newsom wants to pay for it by ending certain business tax deductions.

Assemblyman Phil Ting, a San Francisco Democrat who leads the legislative Budget Committee with Mitchell, said the Legislature will pass roughly 17 trailer bills next week. He said negotiations among the Senate, Assembly and governor still underway, including on how to fund some housing proposals.

“There are a couple items still out there,” Ting said. “Deals take time.”

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