CA Legislature Passes Budget Ensuring They Get Paid, But Still Need Agreement With Gov. Newsom

The California Legislature passed their version of the state budget on Monday, barely meeting the June 15th deadline to pass a state spending plan.

Assembly Bill 128, also known as the Budget Act of 2021, list out a $267.1 billion plan, largely following Governor Gavin Newsom’s May revised budget of $267.8 billion. Among the cues the budget takes from Newsom’s plan is the spending of the $76 billion surplus and an additional $25 billion in COVID-19 aid, increased spending for a variety of programs in the state ranging from homelessness to expanded free classes for children to healthcare, and other COVID-19 relief programs.

However, the main divide between Newsom and legislators is between one-time spending only programs and long-term yearly increases in programs.

Newsom has stated that he wants to spend the surplus now on things California needs in the wake of the pandemic, including $12 billion going to one-time-only $600 stimulus checks for all Californian workers making under $75,000 a year, and another $12 billion on housing for the homeless. However, the legislative budget passed on Monday, primarily by Democratic Assembly members and Senators, would give yearly boosts to funding, expanding the budget for years to come, such as through a $1 billion a year program that would give local governments funds to combat homelessness.

Other disagreements include differing ranges on who is covered under certain parts of the budget. For example, while the Governor’s budget includes a program that gives $1.3 billion a year for health insurance to low-income illegal immigrants ages 60 and older, the legislative plan significantly drops the age range to 50 and older.

Democratic praise, Republican condemnation over the budget

Democratic legislators praised the passage of their part of the budget Monday, noting that the passage will lead to a quicker California economic comeback.

“Today we passed a state budget that will strengthen California’s recovery after fifteen long months of uncertainty and hardship due to the COVID-19 pandemic. While millions of Californians are struggling, this budget makes critical investments in homelessness and housing, education, and small business support, all of which will contribute to the California Comeback,” said Assemblyman Marc Berman (D-Menlo Park) in a statement on Monday.

“I am particularly excited that two student-centered initiatives that I led are receiving funding in the budget. Hundreds of thousands of California community college students are having to ask themselves, ‘Do I pay rent this month or buy textbooks for my classes? Should I take an extra shift at work to afford groceries or should I attend class?’ After several years of advocating for students’ basic needs, I am thrilled we are allocating $30 million in ongoing funds so that every community college campus can establish a basic needs center and hire a basic needs coordinator. In addition, we are investing $10 million in a common course numbering system for community colleges, which will save students much needed time and money by making it easier to earn their degree and transfer to a four-year institution if they want to. Student success is critical to the California Comeback, and with these critically important investments we are well on our way.”

However, despite the budget’s passage, Republicans were vehemently opposed to the bill, noting the lack of transparency, the lack of public input in the bill, and the irresponsibility of spending all of the estimated surplus in one bill. Senator Jim Nielsen (R-Red Bluff) specifically noted on Monday that the budget may only lead to more financial trouble in the future.

“This is a fake budget and the Democrat-controlled budget process, with no public input or transparency, is a sham,” explained Nielsen on Monday.  “Over the years, there have been a number of challenging budget bills with deficits. This year, California has a substantial surplus. The temptation is to spend it and that’s exactly what the Democrats are doing.”

“The Democrats’ irresponsible budget is funding long-term spending using short-term dollars, which might further burden future budgets and get the state, as it has before, into financial trouble.

“Following the Budget Act will be dozens of so-called budget trailer bills. Many will contain major policy provisions that will circumvent the normal deliberative legislative process. Today, I argued for caution and a ‘No’ vote.”

A state budget is required to be passed by the Legislature by June 15th under state law, or lawmakers forfeit their pay. The bills’ passage now gives the budget an additional 15 days to pass, as a new budget must be agreed upon between the Governor and the Legislature by June 30th – the end of the fiscal year.

Newsom’s office said on Monday that he hopes to reach an agreement with them soon, closely in line with his budget proposal made last month.

“The administration looks forward to working with the Legislature over the next several days now to come up with a final budget agreement that maintains a strong fiscal foundation that doesn’t over-commit the state to long-term spending that it cannot afford and which could potentially lead to cuts in the future to core programs,” Department of Finance Chief Deputy Director Erika Li said on Monday.

Negotiations over the 2021-2022 budget are expected to continue over the next two weeks between the Governor and the Legislature.