Cal­i­for­nia Law­mak­ers Agree on Bud­get’s Broad Brush Strokes

The Bond Buyer - - Front Page - By Kee­ley WeB­ster

Cal­i­for­nia Gov. Gavin New­som and Demo­cratic leg­isla­tive lead­ers reached a broad bud­get agree­ment Sun­day that scrapped the gover­nor’s pro­posal for a drinking wa­ter tax and expands health­care for peo­ple in the coun­try il­le­gally.

“I ap­pre­ci­ate the hard work of Bud­get Com­mit­tee chairs Sen. Holly Mitchell and As­sem­bly mem­ber Phil Ting and all the mem­bers of the Con­fer­ence Com­mit­tee to de­velop and adopt a bud­get frame­work that is struc­turally bal­anced and in­vests in a Cal­i­for­nia for All,” Gov. Gavin New­som said in a state­ment.

The bud­get con­fer­ence com­mit­tee reached a broad-strokes bud­get agree­ment, but the en­tire Leg­is­la­ture is ex­pected to vote Fri­day on the $214 bil­lion pro­posed bud­get ahead of the June 15 dead­line.

Cal­i­for­nia As­sem­bly Speaker An­thony Ren­don, D-Para­mount, called the bud­get “one of the best bud­gets in his­tory,” be­cause it main­tains needed re­serves and expands critical pro­grams for Cal­i­for­nia res­i­dents.

New­som had pro­posed a $140 mil­lion tax on res­i­den­tial, com­mer­cial and agri

cul­tural wa­ter users to help pro­vide a re­li­able source of clean drinking wa­ter.

He scrapped his wa­ter tax pro­posal amid crit­i­cism from Se­nate Democrats, whose con­stituents were op­posed to the tax on wa­ter bills with the state pro­ject­ing a $21 bil­lion surplus.

EMIS­SION CRED­ITS

The com­pro­mise would use $133.4 mil­lion pri­mar­ily from the state’s green­house gas emis­sion cred­its in the state’s cap-and-trade pro­gram to fund clean wa­ter projects.

Talks stand in stark con­trast to re­cent years, dur­ing which transporta­tion has been a pri­mary topic.

The bud­get con­tains more than $2 bil­lion for hous­ing and home­less­ness in­clud­ing $500 mil­lion to build roads, wa­ter and sewer for in­fill de­vel­op­ment and $650 mil­lion in sup­port to lo­cal gov­ern­ments for emer­gency home­less­ness pro­grams.

It also ex­tends Medi-Cal, the state’s sub­si­dized med­i­cal pro­gram for low-in­come res­i­dents, to peo­ple in the coun­try il­le­gally, who are un­der the age of 25.

The bud­get also brings back the fine for peo­ple, who don’t carry med­i­cal in­sur­ance that was in the orig­i­nal Oba­macare leg­is­la­tion.

The Leg­is­la­ture did not in­clude New­som’s pro­posed tax changes that would con­form part of state tax law to the 2017 fed­eral tax bill to ex­pand by $800 mil­lion the earned in­come tax credit for the work­ing poor.

His pro­posed changes also would have con­formed with the fed­eral tax break for op­por­tu­nity zones and was ex­pected to bring in an es­ti­mated $1 bil­lion in ad­di­tional rev­enues.

CONFORMING

The Leg­is­la­ture pushed dis­cus­sion about changes to con­form to the fed­eral tax law out­side of the bud­get process and set a dead­line to reach an agree­ment by July 1.

EMER­GENCY PRE­PARED­NESS

New­som said the bud­get also “in­vests in emer­gency pre­pared­ness and re­sponse, pro­vides sus­tain­able fund­ing for safe drinking wa­ter, and in­cludes im­por­tant fund­ing aug­men­ta­tions to ad­dress the cost cri­sis in our state — tax cuts for small busi­nesses and work­ing fam­i­lies, ex­panded health care sub­si­dies, his­toric fund­ing for our schools and fund­ing to serve more stu­dents at UC and CSU.”

The agree­ment reached with Se­nate Pres­i­dent pro Tem­pore Toni Atkins, D-San Diego, and Ren­don was rat­i­fied by the Leg­is­la­ture’s bud­get con­fer­ence com­mit­tee Sun­day evening.

Atkins high­lighted as bud­get ac­com­plish­ments in­vest­ments made in safe drinking wa­ter and his­toric lev­els of fund­ing for Cal­i­for­nia schools and fi­nan­cial as­sis­tance to Cal­i­for­nia’s mid­dle class fam­i­lies to pay for health care cov­er­age in a state­ment.

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