By Jessica Calefati, The Mercury News
Gov. Jerry Brown and the Legislature's top Democrats have agreed on a framework for a state budget that makes a generous deposit into a rainy-day savings account and sets aside close to a half-billion dollars for affordable housing, administration sources said Thursday.
Despite a Wall Street slowdown that led Brown last month to release a revised $122.2 billion general fund budget that had shrunk slightly compared to January, legislative leaders convinced him to increase spending not just for housing, but also for child care and welfare programs.
But Senate President Pro Tem Kevin de León and Assembly Speaker Anthony Rendon weren't the only ones who walked away from the negotiating table happy, the sources said. Brown convinced them to support a $2 billion rainy-day fund deposit he wanted instead of fighting to spend that money on new programs or services.
Details of the agreement emerged as the Legislature's budget committee Thursday night prepared to meet to ratify the compromises that Brown and the leaders struck during a series of closed-door meetings that took place after several weeks of unusually productive talks.
Last year, the two camps were so far apart on their budget priorities that the Legislature passed its own spending plan before striking a deal with Brown several days later. This year, lawmakers are on track to cast final votes on a budget for the fiscal year that begins in July well ahead of the June 15 deadline set by the state constitution.
"It's always a challenge to look at the compromise as a glass half full rather than half empty because there are disappointments," said Sen. Mark Leno, D-San Francisco, who co-chairs the budget committee. But "there have been many darker days than what we're facing today. These are the good times."
The major difference between then and now is how much Brown and lawmakers accomplished this year before tackling the budget. Already, they've worked together to enact a replacement tax on health care plans that helped avoid a cutoff of badly needed federal funding and boost California's minimum wage to $15 an hour by 2022.
At a news conference last month, Brown admitted it would be tough to convince Democrats to deposit as much money in the state's savings account as he wanted when there are so many worthy causes to fund. But, he said at the time, a $2 billion deposit would be essential to prepare the state for the next recession, which he said is looming.
Unlike his counterparts across the country, Brown has largely avoided supporting the types of flashy initiatives governors often enjoy taking credit for. Instead, he has staked his legacy on his successful stewardship of the state's finances. So the rainy-day fund budget victory bolsters his image as a fiscally prudent state executive.
Investing in affordable housing is a priority Rendon shares with his predecessor, Assemblywoman Toni Atkins, D-San Diego -- and the budget sets aside $400 million to build more of it. The funds will be appropriated later this year once the Legislature approves a version of Brown's "by right" zoning proposal, which would limit local governments' say over proposed development that includes units of affordable housing. It has drawn opposition from localities.
Repealing the CalWorks rule that blocks women on welfare from getting any extra financial support for new babies has been a top priority of legislative Democrats in the years since funding for social service programs was decimated at the height of the state's budget crisis. De León and Sen. Holly Mitchell, both Los Angeles Democrats, have led the charge in recent months.
Abolishing the "maximum family grant" provision will provide cash aid for 130,000 children in 95,000 families starting in January. It will cost the state's general fund $95 million during the fiscal year that begins in July. But after rising in 2017-18, the cost is expected to dip to just under $1 million in 2019-20, after which the costs will be fully covered by a separate, existing fund.
The budget agreement also boosts funding for child care and preschool programs by $500 million. Over the next four years, that money will finance 9,000 new preschool slots for low-income families and cover the cost of workers' salaries as the state's new minimum wage law is phased in.
"An investment in child care is prudent, keeps children learning and parents working and prevents costly academic interventions later on," said Sen. Hannah-Beth Jackson, D-Santa Barbara, chairwoman of the California Legislative Women's Caucus.
The Legislature is expected to vote on the budget next week. Brown must sign the spending plan into law by the end of the month.
©2016 the San Jose Mercury News (San Jose, Calif.) Distributed by Tribune Content Agency, LLC.
