Thread: CA Legislative leaders agree on $131 billion state budget

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Posted on Mon, Jun. 26, 2006

Legislative leaders agree on $131 billion state spending plan

AARON C. DAVIS
Associated Press

SACRAMENTO - California lawmakers on Monday said they had reached a deal over a roughly $131 billion state budget that substantially increases funding for classrooms and roads and spends billions of a tax windfall to pay down state debt.

While the budget still requires a two-thirds vote in the Legislature, leaders of both parties promised to bring the spending plan to a vote Tuesday night and send it to the governor this week. That would give California its first on-time budget in six years.

Signing the budget before the start of the fiscal year that begins Saturday also would clear Gov. Arnold Schwarzenegger's last major governing hurdle before the November election.

"In an election year when normally nothing is ever done, we got this done, so this is really great," he said during a meeting with the top legislative leaders of both parties.

The budget hands Republicans a victory by eliminating plans to pay for health care coverage for children of illegal immigrants, but Democrats largely win in deciding how to carve up billions in unexpected revenue. More state dollars would go to foster care, child care and reducing tuition at community colleges, and $250 million is earmarked for overdue maintenance at state parks.

The budget came together more quickly in the Legislature than in recent years thanks largely to a tax windfall of $7.5 billion.

The unexpected revenue from stock gains, real-estate prices and rising business profits allowed Schwarzenegger in May to propose spending more than the state will take in next year, continuing the state's so-called structural deficit.

Schwarzenegger proposed using the additional money to increase funding for education, pay down debt and sock away money for reserves. The legislature's budget largely fulfills those goals, said H.D. Palmer, spokesman for the governor's finance department. It also does not raise taxes.

Assembly Speaker Fabian Nunez said more Californians would benefit under the deal struck by legislative leaders than under the governor's plan.

"This is not just a fiscally responsible budget but a morally responsible budget," Nunez said, outlining how the budget also would boost funding for welfare mothers and students striving to learn English.

The budget would also better distribute education dollars and give local school districts more control over classroom priorities, he said.

An on-time budget was not always certain. Negotiations slowed in recent weeks after Republicans objected to a Democratic plan to include money for health care coverage for the children of illegal immigrants.

Assembly Democrats had proposed expanding a health care program to children of parents who make up to 300 percent above the federal poverty line. The current cutoff is 250 percent under a program known as Healthy Families. Democrats wanted the program expanded by 2008.

State officials estimated the expansion would cost taxpayers more than $300 million annually by then, mostly to cover the children of illegal immigrants.

Republicans opposed both that plan and a more modest one by Schwarzenegger to reimburse counties $23 million for 87,000 children they now cover, including illegal immigrants.

Democrats abandoned their plan for the broad health care expansion last week. According to a copy of the budget agreement, Schwarzenegger's plan also was cut.

Democrats say they will attempt to pass a bill when the Legislature reconvenes in August to expand children's health care. Schwarzenegger has said he does not approve of the expansion and would likely veto it, but a November ballot initiative that would increase taxes on a pack of cigarettes by $2.60 might do the same thing.

The proposition would raise an estimated $371 million annually for children's health insurance.

Assembly Republican Leader George Plescia of La Jolla declined to comment directly about the details of the budget, saying he didn't want to disrupt final negotiations. But he hinted that he was pleased with the outcome - at least on the health care proposals.

According to the budget document, Republicans also won funding increases for public safety and a new formula for more equitably distributing education dollars to schools.

"I don't want to negotiate the details in the press," Plescia said, "but it's something our caucus will be pleased about."

The overall spending plan is expected to be about 12 percent higher than in the current fiscal year, reflecting the state's rebounding economy.

Spending from the general fund will grow to $101.3 billion, with the rest of the spending going to special funds or bond payments.

Spending on education, the largest slice of the budget, will increase from $50 billion this year to more than $55 billion next year, under a deal Schwarzenegger struck last month that also ended a two-year feud with the state's largest teachers union.

The California Teachers Association has been critical of Schwarzenegger, saying he had backed out of a deal struck shortly after he took office in 2003 to repay schools billions of dollars they were owed.

State Treasurer and Democratic gubernatorial candidate Phil Angelides said Schwarzenegger's funding increase this year for schools was insincere.

If Schwarzenegger is re-elected, "he will cut schools, he will raise tuition fees, he will cut health care for kids," Angelides said during a news conference at the Capitol. "It's what he did the last time he was in a pinch."

He also criticized the budget's operating deficit, which would be about $3.3 billion next fiscal year under the plan.

"I don't want to negotiate the details in the press," Plescia said, "but it's something our caucus will be pleased about."

Yeah, They don't want the public to know what they are doing. The details getting to the press might just tip off the public.

"This is not just a fiscally responsible budget but a morally responsible budget," Nunez said, outlining how the budget also would boost funding for welfare mothers and students striving to learn English.

So nice to know that this jerk thinks he knows best how to spend our money better than we the people do. Nothing like bending over and raping the taxpayers in the name of compassion.