NORTHERN CALIFORNIA – On Tuesday, Gov. Jerry Brown, Senate President pro Tempore Kevin de León and Assembly Speaker Anthony Rendon announced that they have reached an agreement on the 2017-18 State Budget.
The budget includes a general fund totaling $127 billion, state officials reported.
"This budget keeps California on a sound fiscal path and continues to support struggling families and make investments in our schools. We've come together on this balanced and progressive budget and I'm confident that we can do the same to extend our critical cap-and-trade program," said Gov. Brown.
"This state budget will keep California strong, protect our fiscal stability and empower our communities at a time when Washington is determined to undermine them. This budget makes historic investments in health care, education, and childcare, and lays down a multi-billion dollar investment to start fixing our roads and infrastructure. This is how government works - by the people and for the people," said de León.
"This is a budget that does things for people, not to people. It is a combination of fiscal responsibility, including the biggest reserves in state history, major spending improvements to fight poverty and improve education, and significant reforms stemming from our strong oversight of the Board of Equalization and the University of California," said Rendon.
Veteran lawmaker Senator Jim Nielsen (R-Tehama), vice chairman of the Senate Budget Committee, said that conspicuously absent from the budget deal are projects to improve and upgrade deteriorated and compromised water infrastructure including Oroville Dam, and river and bypass levees.
“This neglect puts people and properties at great risk,” Nielsen said.
Nielsen also criticized the budget package for making changes to policies not involved with budgeting – such as change to the state’s recall law – and said that it “takes gas and car tax money that is supposed to go to roads, highways and bridges to pay for recruiting lifeguards, park rangers and state park maintenance and local park operations.”
State Sen. Mike McGuire, whose district includes Lake County, said on Tuesday that he was pleased that many of the critical issues he fought for that will benefit Northern California have been included in the state’s budget.
“We have always said that we will fight hard for Northern California to get their fair share when it comes to state resources, this budget reflects that top priority,” McGuire said. “Local students will benefit from the largest boost in education funding in California history, we’re investing in medical and dental services that will expand programs for the most vulnerable, nearly $3 billion for our crumbling roads will be put to work and our rainy day fund remains strong at $8.5 billion.”
McGuire said the budget includes the largest increases in public education funding in California history. School funding has increased $4,500 per student, over the last six years. Schools will now receive $11,058 per student which is the highest the figure has been in California history.
He also lauded $2.8 billion to fix the state’s crumbling highways and local streets and roads, the increase to the Rainy Day Fund and the expansion of the Earned Income Tax Credit, which he said will benefit tens of thousands of low income workers across the North Coast and throughout California.
Other significant features of the budget include more than $460 million for physician and dental rate increases, which McGuire said will expand Medi-Cal for the state’s most vulnerable residents, and $50 million will be included for family planning services, which will be met with a 9-1 federal match, which will benefit programs such as Planned Parenthood.
McGuire said the California Senior Legislature is receiving $375,000 from the General Fund to bridge their funding gap until new legislation goes into effect for its long-term funding sustainability, allowing the CSL to continue advocating on behalf of California’s senior community.
“The bottom line: This year’s budget keeps California moving forward, but recognizes the need to protect the rainy day fund as there could be a softening of the economy ahead,” McGuire said.
The Legislature is expected to take up 16 budget bills this Thursday, June 15.
Additional budget related bills may be taken up in the coming few weeks.
The budget agreement includes the following highlights.
Maintaining fiscal prudence
Under this agreement, the state continues to plan and save for tougher budget times ahead.
The budget package adds $1.8 billion to the state's Rainy Day Fund, bringing the fund to a total of $8.5 billion in 2017-18 – 66 percent of the constitutional target.
That fund is expected to grow to $12 billion by 2021.
However, with the federal government contemplating actions that could send the state budget into turmoil – including defunding health care for millions of Californians, ending deductions for state taxes and eliminating funding for organizations like Planned Parenthood – uncertainty remains.
Supporting working families
The budget expands California's Earned Income Tax Credit to support more working families, including self-employed parents, in line with the federal EITC.
In addition, it expands income ranges to help families working up to full-time at the newly increased minimum wage benefit from the program.
The expansion makes more than one million more households eligible to claim the credit. For the 2015 tax year, almost 400,000 households claimed the credit.
Increasing money for schools
Funding for K-14 schools is expected to grow by $3.1 billion over the revised 2016-17 level to $74.5 billion in 2017-18 – an increase of $1.0 billion since January and $27.3 billion over six years, or 58 percent.
Schools would receive an additional $1.4 billion next year for the Local Control Funding Formula, which would increase the formula's implementation to 97 percent complete.
The budget also includes a total of $14.5 billion General Fund for higher education, with additional funds provided in the next year to expand capacity for California students at the state's public institutions, create guided pathways for students to earn degrees and credentials and keep the costs of attendance low for students and their families.
Additionally, it holds the University of California accountable for implementing needed reforms to its cost structure so that the system remains sustainable over the long term.
Reducing pension liabilities
The budget includes supplemental payments to the California Public Employees' Retirement System, or CalPERS, with a loan from the Surplus Money Investment Fund, a step that is expected to save the state $11 billion over the next two decades while continuing to reduce unfunded liabilities and stabilize state contribution rates.
The state will achieve these savings and reduce these liabilities by leveraging existing resources, without the cost or risk of external borrowing.
Repairing infrastructure
The budget accelerates $2.8 billion toward improving commutes, fixing roads, strengthening overpasses and bridges and building mass transit.
Medi-Cal funding
California will continue its large investments in the Medi-Cal program – including new revenue from Proposition 56 – to serve millions of people who rely on this program for health care.
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