Capitol Alert

California lawmakers approve budget bill – on deadline

California lawmakers, acting on the constitutional deadline to pass a state budget without losing their pay, approved a new state spending plan Wednesday that targets more money at a range of programs yet puts off some key decisions on affordable housing and the state’s cap-and-trade program.

The $122.5 billion package repeals a controversial cap on welfare payments, includes more money for higher education, raises rates for child care providers and puts an additional $3 billion into the state’s rainy-day reserve, including an optional $2 billion shift demanded by Gov. Jerry Brown to protect against a feared economic downturn.

The pact also calls for borrowing $2 billion against revenue from the state’s mental health services tax to build housing for people with mental illness, a proposal that will be taken up Thursday in both houses. Other budget proposals are weeks away from action, if not longer. Talks will continue on spending $400 million on affordable housing in return for easing local government’s land use authority, and how to allocate money – potentially much less than expected earlier this year – from state auctions of pollution credits.

The main budget bill passed largely along party lines Wednesday afternoon. Democratic lawmakers praised the plan, highlighting its new spending as “investments” in the state’s future and a far cry from the deep spending cuts and red ink of recession-era proposals.

“Though there are never, unfortunately, enough funds to address all of our top priorities, this budget is one of which we can be very proud,” said state Sen. Mark Leno, D-San Francisco. “It serves the people of California, I believe, with respect, dignity and appreciation and recognition of the challenges facing their lives.”

Republicans, offering muted criticism of specific line items in the package, warned that it sets the state up for imbalances between spending and revenue in only a few years.

“My biggest concern is the level of state spending,” said Assemblyman Jay Obernolte, R-Big Bear Lake, who added later in a statement that “unsustainable higher expenditure levels that will inevitably trigger another budget crisis.”

Advocates for the poor cheered the repeal of the maximum family grant rule on CalWORKs participants, which for more than two decades has banned additional money for any child born into a family that had been receiving aid.

It will cost the state about $100 million in the first year, with the cost shifted over time to a special account with no impact on the general fund.

“We know it is wrong. It has been wrong for so long,” Senate President Pro Tem Kevin de León, D-Los Angeles, said of the repealed rule.

State Sen. Anthony Cannella, R-Ceres, was the only Republican in either house to vote for the 752-page main budget measure, Senate Bill 826, calling it “a good budget.”

“It’s got lots of things that my district needs that I fought to get in there,” Cannella said.

On Thursday, lawmakers are expected to take up several more budget-related bills that enact policy changes reflected in the main spending measure.

Among those is a transportation bill that includes a $10 increase in the vehicle registration fee, raising it from $46 to $56. The higher fee would raise an estimated $1.7 billion over five years, closing an imbalance in the state’s motor vehicle account. The account helps pay for operations of the Department of Motor Vehicles and California Highway Patrol, as well as improvements to CHP field offices.

“This is not the vehicle license fee. This is the vehicle registration fee,” Leno said during a hearing on the bill Thursday. The license fee, which is hinged to a vehicle’s value, was the focus of bruising political battles in the early 2000s and played a role in the recall of Gov. Gray Davis.

The registration fee is a flat charge. Republican lawmakers on the committee, though, questioned the justification for the proposed increase in the fee.

Also expected to come up Thursday is legislation that would fast-track any environmental lawsuit on the project to renovate or replace the state Capitol’s annex, part of a three-building $1.3 billion downtown Sacramento state office building plan.

In addition, lawmakers will vote on a pair of budget-related measures that need to pass by a two-thirds supermajority, requiring the support of at least some Republicans – the $2 billion in borrowing against the mental health services tax created by Proposition 63, and renewing the quality assurance fee on hospitals, which would raise an estimated $845 million in 2017-18. The latter is expected to win easy approval in both houses.

De León said he is confident the Republican votes are there for the housing bond, as well. State Sen. Bob Huff, R-San Dimas, committed to supporting the measure, as did Cannella, as long as they receive assurances that all parts of the state have a shot at the bond money.

“My fear is that we do this and all the money goes to Los Angeles and San Francisco,” Cannella said. “Rural areas are overlooked. We have the same needs they do and a lot less resources to do it.”

Republican support in the lower house for the measure was a question mark Wednesday. Sacramento Mayor-elect Darrell Steinberg, the former Senate leader who led the campaign for Proposition 63, called several Assembly Republicans on Wednesday to lobby for their support.

“This is a compelling proposal. It’s an essential proposal,” he said.

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