How should California spend $180 billion-plus? Here's what is under negotiation in Sacramento

The odds are high that by the time June 15 comes to an end, a new state budget blueprint will be sitting on Gov. Jerry Brown’s desk.

That’s the deadline in the California Constitution, one that’s not been missed since voters changed the rules almost seven years ago, ending a generation of summer stalemates in Sacramento

The changes have empowered dominant Democrats to craft budgets as they see fit, though a few battles remain over spending priorities. Here’s what will probably be the deal makers, or breakers, once the plan for spending on schools, prisons, healthcare and other big-ticket items for the next fiscal year is set in stone.

Lawmakers and their staff members don’t like to admit it, but a key part of the governor’s success in constraining government spending growth has been his domination over tax revenue forecasts. For six straight years, California’s state budgets have been built on Brown’s cautious economic predictions — and not the more optimistic ones made by the Legislature’s own analysts.

This year, there’s a new twist: Both the state Assembly and Senate largely agree with Brown’s tax revenue predictions for the 12 months that begin July 1, but have crafted proposals that assume higher revenues in the current budget year. That would presumably allow $1 billion (or more) in additional spending.

Keep an eye, too, on how the final agreement counts the sources of money for K-12 schools and community colleges. While all sides are in agreement on how much schools will receive next year, lawmakers believe property tax collections are strong enough to offset the use of hundreds of millions of dollars in personal income tax revenues. That’s one way the Legislature hopes to pay for the additional services Brown has said the state can’t afford.


Perhaps the most intense battle is whether the language of Proposition 56 — last fall’s $2 per pack increase in the state’s cigarette tax — has precise mandates on what kind of healthcare services will be covered by the new cash.

The governor believes there is flexibility, and wants to broadly use the money to help fund Medi-Cal, California’s healthcare program for the poor. Democratic lawmakers, advocacy groups and healthcare industry groups that funded the Proposition 56 campaign believe instead that the initiative mandates the money be spent to guarantee — and even expand — access to Medi-Cal.

Key to that, say Proposition 56 supporters, is using the tobacco tax money to boost payments to doctors who treat Medi-Cal patients. California has some of the lowest such payments in the nation, which means some doctors may turn those patients away.

While legislative Democrats rejected the governor’s plan, lawmakers in the Assembly and Senate still have a few important disagreements on how to spend the money.

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