Capitol Alert

Major issues remain as California budget deadline nears

California Gov. Jerry Brown jokes with reporters by turning a budget chart upside as he discusses his revised state budget plan during a May 14, 2015 news conference at the state Capitol. The legislative joint budget committee was scheduled to meet Tuesday.
California Gov. Jerry Brown jokes with reporters by turning a budget chart upside as he discusses his revised state budget plan during a May 14, 2015 news conference at the state Capitol. The legislative joint budget committee was scheduled to meet Tuesday. The Associated Press

Gov. Jerry Brown and his fellow Democrats in the Legislature continue to negotiate on several items in the California state budget for the fiscal year beginning July 1. Any plan has to be passed by Monday, the constitutional deadline for the Legislature to act, with more budget legislation likely before the fiscal year’s start. A joint legislative budget-writing committee finished its work late Tuesday.

Here are the main differences of opinion between Brown and lawmakers on some key outstanding questions:

How much money is there?

Overview: With California’s economy doing better, the general fund revenue expected through June 2016 exceeds earlier estimates by billions of dollars. Exactly how much is a matter of dispute.

Governor: Assumes the state would take in $115 billion and spend $115.3 billion.

Legislature: Uses far more optimistic revenue projections from the Legislative Analyst’s Office. Assumes state will take in about $119 billion in the budget year, with more than $117.5 billion in total spending.

Should child care be expanded? Should the workers unionize?

Overview: Funding for various types of state-subsidized child care and early education is about $1 billion less than it was before the recession. Lawmakers allocated $2.4 billion in state and federal money a year ago.

Governor: Adds $101 million to create 4,000 new slots.

Legislature: Reflects $390 million more than governor's proposal, for an additional 27,000 slots, and higher reimbursement rates. Ongoing annual cost would be $563 million. Home providers would have ability to collectively bargain. Extra money largely outside of Proposition 98 school funding guarantee after opposition from teachers union, other school groups.

How much should UC get?

Overview: UC moved to raise fees last fall, angering lawmakers and setting off months of private talks between Brown and UC President Janet Napolitano. UC ultimately agreed to a two-year tuition freeze for in-state students and a pension overhaul. It is up to the Legislature to approve the deal.

Governor: Brown agreed the state would increase UC’s base funding by $119.5 million in the coming year.

Legislature: Increases UC funding $25 million above the governor’s proposal, with that money contingent on several conditions, such as UC moving to increase enrollment by 5,000 in-state students by 2016-17 and that UC will not raise residential tuition in the next two years.

Should Medi-Cal providers make more money?

Overview: Hospitals, health care worker unions and other interests want California to rescind a much-litigated 10 percent cut in the reimbursement rates of doctors and dentists who treat Medi-Cal fee-for-service patients. Restoration would cost more than $200 million annually. Advocates say lower rates cause providers to stop taking Medi-Cal patients, reducing access to care.

Governor: Budget does not restore cut.

Legislature: Eliminates one-half of the reduction for dental providers effective July 1, at a cost of $15 million. Expands the one-half restoration to all other providers effective April 1.

How much should welfare recipients get?

Overview: For two decades, state law has denied extra benefits to women and families who have a new child while receiving assistance from the California Work Opportunity and Responsibility to Kids program, known as CalWORKs. Past legislation to eliminate the maximum family grant cap failed.

Governor: Budget maintains the cap.

Legislature: Eliminates maximum family grant rules as of Jan. 1, 2016, at a cost of $105 million in 2015-16 and an estimated $210 million annually thereafter.

Should home-care workers be allowed to work more hours?

Overview: Lawmakers reduced home-care workers’ hours during the recession. Unions and disability rights advocates sued, and under a 2013 settlement, the Brown administration agreed to try to restore the cut.

Governor: Wants to raise an estimated $1.7 billion from expanding the tax on health plans. Of that, $215.6 million would go to restoring the home-care service hours.

Legislature: Wants to restore hours, effective in October, at a general fund cost of $171 million. Money to pay the full-year costs of $228 million would come from an expanded tax on managed-care organizations.

How much to save for a rainy day?

Overview: California voters approved a stricter rainy-day reserve and debt-repayment fund in November. The rules governing how and when that money can be spent, though, came after lawmakers had already set aside $1.6 billion. That money could be put toward more spending as part of a final agreement.

Governor: Assumes total reserves of about $4.6 billion.

Legislature: State would have $5.7 billion in total reserves, a number that reflects LAO’s higher revenue estimates.

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