California budget: Gov. Brown reaches deal with Legislature

File: California Gov. Jerry Brown announces his public employee pension reform plan Oct. 27, 2011 at the State Capitol in Sacramento.
File: California Gov. Jerry Brown announces his public employee pension reform plan Oct. 27, 2011 at the State Capitol in Sacramento.
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A budget deal has been reached between California Gov. Brown and leaders in the state Legislature, according to a statement from Brown's office.

“The leaders of the Legislature have worked very hard to build a solid and sustainable budget that pays down debt, brings stability to the teachers’ pension system and builds at long last a reliable Rainy Day Fund,” Brown said in the statement.

RELATED: Gov. Brown proposes another $242 million in funding for California schools
“This budget proves once again that negotiation and cooperation can achieve a great outcome," said Senate President pro Tem Darrell Steinberg in a statement, adding that the budget has a "clear focus" on children. "We’re expanding preschool for our youngest and career pathway programs for our older students."

Steinberg also said that the budget works to fix problems in the prison system, along with making other investments.

“We’re changing the course of our failed corrections system with better solutions to help offenders become productive citizens, and making smart investments to fight climate change with permanent funding for mass transit and affordable housing," Steinberg said.
“For the first time in almost a decade we make real investments in our people," said Assembly Speaker Toni Atkins. "We were able to make these investments while reducing the debt hanging over our head and building a strong reserve for emergencies. For years California’s budgets were about getting out of a hole. This budget is about building a foundation for the future.”

Mike Roe

10 Things to Know about the California budget

Not all budget figures were available Friday, the Associated Press reports, because the administration and legislative staff were still finalizing the details. Because the budget needs only a simple majority to pass the Legislature, support from minority Republicans is not required. The Assembly and Senate have scheduled floor sessions for 4 p.m. Sunday to begin voting on the budget.

1. How big is the budget?

The final general fund spending package presented by Democratic lawmakers is $108 billion, slightly higher than Gov. Jerry Brown's proposal of $107.8 billion. Combined with bond funds and special funds dedicated for specific programs, total state spending for the 2014-15 fiscal year will be $156.4 billion.

2. How much is going to pay off debts and save for the future?

The Legislature adheres to the governor's proposal to put $1.6 billion into the state's rainy day fund and pay down debts, leaving a $460 million reserve. The budget also includes a long-term plan to begin paying down nearly $74 billion in unfunded liabilities for the California State Teachers' Retirement System.

3. How much will go to Medi-Cal providers, and how much will it cost to comply with the nation's new health insurance system?

The budget leaves in place a 10 percent cut in reimbursements to doctors and hospitals treating patients enrolled in Medi-Cal, the state's health insurance program for the poor. Health advocates say the cut makes it harder for low-income patients to access doctors and specialists.

The budget includes about $1 billion to cover higher-than-expected Medi-Cal enrollment as a result of the Medicaid expansion under the Affordable Care Act. The administration had projected 10.5 million people would enroll in Medi-Cal in the 2014-15 fiscal year but increased that estimate in May to 11.5 million, or about 30 percent of the state population.

4. How will the state spend revenue from its greenhouse gas reduction law?

As a result of California's landmark global warming law to reduce carbon emissions, the state could soon begin collecting billions of dollars each year from fees paid by industry. The budget will include $250 million from the so-called cap-and-trade fund for California's $68 billion high-speed rail project, a priority of Brown's.

In future years, 25 percent of cap-and-trade revenue would go to the rail project, 40 percent will go toward water and energy efficiency programs, natural resource conservation and cleaner transportation, and 35 percent will go for public transit and affordable housing projects that help reduce greenhouse gases.

5. Will the budget limit school districts' rainy day funds?

Republicans, school administrators and the American Civil Liberties Union are upset that the budget will limit how much money school districts can keep in reserves. They say the language, favored by the California Teachers Association, would put schools in financial danger and lead to more teacher layoffs in economic downturns.

6. How are in-home care providers affected?

Relatives and workers who care for the elderly and people with disabilities outside of nursing homes would have been denied overtime under Brown's original budget proposal. After intense pressure from unions and Democratic lawmakers, the updated budget plan includes $180 million for overtime pay in exchange for rules to prevent excessive overtime.

7. What happened to the push for universal preschool?

Senate leader Darrell Steinberg, D-Sacramento, received far less than the $1 billion he originally sought for transitional kindergarten for all 4-year-olds. The budget instead includes $264 million for expanding education before kindergarten, starting with 11,500 new preschool spots for low-income families and increased child-care reimbursement rates. Combined with existing programs, the proposal would provide early education assistance to roughly 234,000 children, covering half of all 4-year-olds in the state.

8. How are welfare recipients affected?

Starting next April, the maximum aid allowed under California's welfare-to-work program, known as CalWORKS, will increase by 5 percent.

9. What's the share for public universities and colleges?

The University of California and California State University systems will receive an extra boost of $50 million each if the state receives more money from property taxes than expected, plus $100 million for deferred maintenance projects.

10. Why aren't taxpayers getting a rebate?

The idea of sending surplus revenue back to taxpayers is not unprecedented: Californians received as much as $150 under the 2000-01 budget. But Brown administration officials say the state carries far too much debt and liabilities to forego the additional revenue. Besides, state government ended up scrambling for cash after that earlier rebate once the dot-com bubble burst.

The Associated Press

This story has been updated.