Gov. Gavin Newsom and Democratic congressional leaders on Monday agreed to a $310.8 billion budget spending plan that reflects a compromise to the governor’s last-minute proposal to cut climate spending and accelerate infrastructure projects across California. bottom.
The 2023-2024 Budget Accord, which lawmakers will vote on in a series of bills this week, will end weeks of Democratic infighting that began after the governor introduced infrastructure legislation at the end of the budget process. to approve a highly controversial plan to build a $16 billion tunnel under the Sacramento-San Joaquin River delta to transport water south.
Newsom last week threatened to veto Congress’ budget priorities if Congress didn’t approve his infrastructure plans. The two sides eventually agreed to an agreement to exclude the Delta Tunnel project from the package while maintaining measures to mitigate delays to other major projects due to legal issues under California environmental law.
“Amid continued global economic uncertainty, this budget maintains historic investments in public education, health care, the climate and public safety while boosting budget reserves to a record $38 billion,” Newsom said in a statement. It will increase fiscal discipline by expanding to The deal was announced late Monday night.
California’s budget deficit has complicated negotiations in the state capitol, with financial analysts expecting tax collections to fall nearly $32 billion short of funds allocated to state programs.
The governor and Democratic-led congressional leaders agreed to defer nearly $8 billion in spending, including $550 million allocated for building facilities for the transitional and full-time kindergarten programs. Lawmakers and the governor agreed to another $8 billion in cuts, including $750 million in payments to the federal government for coronavirus-related unemployment insurance debt.
The deficit represents a new economic challenge for California and could prevent Mr. Newsom from fulfilling his expensive policy promises in a second term. The current deal seeks to keep funding Newsom’s flagship programs, including extending Medi-Cal eligibility to all immigrants regardless of legal status, while hiding $37.8 billion in reserves. .
Here’s what you need to know about the six key areas of the 2023-24 Budget Spending Plan, which takes effect July 1st.
Confusion over infrastructure
Newsom’s plan to streamline the infrastructure-building process in California was the most contested policy proposal in budget negotiations.
The agreement includes amending the state’s landmark California Environmental Quality Act by reducing the opportunity for lengthy legal challenges to major infrastructure projects. Environmental law requires that potential environmental impacts be considered before a project is approved, but environmental groups and project opponents are among the strategic forces to stop or change construction projects. has been used for
Some environmentalists objected to the hasty nature of the governor’s plan, arguing that it sought to weaken California’s environmental laws and protections without sufficient time for policy review and public opinion.
Opponents of a controversial underground tunnel to transport water from the Sacramento-San Joaquin River delta to Southern California have won a budget compromise.
Former director of the Sierra Club, Kathryn Phillips, described Newsom’s proposal as “environmental nightmare“And I said I would”destroy one of the largest estuaries in North America” last week.
Newsom and environmental groups often disagree, but it’s unusual for Capitol Democrats to openly criticize a governor.Last week, a bipartisan group of 10 lawmakers sent a letter to newsom They outlined their reasons for opposing the proposal, including that construction of the tunnel would have serious health and environmental impacts on three counties: Sacramento, San Joaquin, and Contra Costa.
Several other Democrats publicly accused Mr. Newsom during congressional hearings of trying to force such a bill into the budget process at the last minute.
Ultimately, Mr. Newsom agreed to remove the tunnel from the list of streamlined infrastructure projects, according to multiple people involved in the negotiations. Lawmakers also successfully pushed for a final agreement that would require states to reduce their impact on disadvantaged communities.
More funding for health care providers
Physicians and other Medi-Cal providers have found the nearly 16 million Californians, one-third of the state’s population covered by the state’s subsidized health care program, to have access to care due to low reimbursement rates for services. It has long argued that access is declining.
With the support of a broad coalition of doctors, community health centers, hospitals and labor unions, Newsom and lawmakers launched what is known as the MCO tax to fund Medi-Cal as the state expands. agreed to update the tax on managed medical institutions qualified pool. The tax is expected to generate $19.4 billion in state revenue from 2023-2027.
The budget calls for the first rate hike in over 20 years, in some cases, and adopts a faster spending schedule than Newsom proposed in May.
Lawmakers and governors have set aside $2.7 billion annually for rate hikes and other investments from 2025 to 2029, of which $1.65 billion will be for primary and specialty care rate hikes. The deal also provides $555 million for emergency and inpatient services and $300 million for behavioral health beds.
While the deal represents a win for some health care providers, Senator Carolyn Mengevar (D, Panorama City) questioned why clinics serving the poorest neighborhoods were not discussed in the final negotiations. Presented.
At a congressional hearing on Monday night, he said, “I’m a little annoyed that who was included in the debate about what the breakdown of the MCO was, or what was ultimately completed as a result, who gets the pie. there is,” he said.
Slightly reduced future efforts to combat climate change
Mr. Newsom hyped last year that the state was investing $54 billion in climate change programs, but only hinted at cutting $6 billion in May when the deficit became more evident.
In the end, Democrats compromised and agreed to pay $51.4 billion for climate change programs.
The deal will allocate more than $1 billion to coastal restoration and clean energy programs and return nearly $300 million to the State Coastal Conservation Society.
Public transport funding recovers
The final deal overturned the governor’s call for $2 billion in public transit cuts after extensive lobbying by urban transit agencies and Democratic lawmakers in San Francisco and Los Angeles. The deal includes transportation costs totaling $5.1 billion over four years.
In anticipation of potential future cuts, Democratic lawmakers Monday raised the toll on seven state-owned bridges in the Bay Area by $1.50, generating about $180 million a year from 2024 to 2028 in another bid. Submitted a plan.
funds to refurbish prisons
Newsom’s deal with lawmakers kicks off his drastic plan to repurpose San Quentin State Penitentiary into a rehabilitation-focused facility and formally begin the process of renaming it San Quentin Rehabilitation Center. It will be.
Despite early backlash from lawmakers, infuriated by Newsom’s suggestiontogether The Independent Legislative Analysis Bureau criticized the plan for lacking necessary detail., the final budget included what the governor had asked for, including about $380 million to rebuild certain areas of San Quentin. The plan will focus on fully converting prisons into Norwegian-style facilities and on vocational training and other programs to prepare individuals for re-entry in a way that reduces recidivism rates.
San Quentin’s transformation builds on Newsom’s multi-year effort to overhaul the state’s criminal justice system. Newsom began the effort in 2019 by issuing an executive order to suspend the death penalty and close prison execution chambers.
The state legislature will also give the state police training and standards board more time to comply with the portion of the law passed in 2021 that sets out the disqualification process for police officers who commit illegal acts. Negotiated an agreement with the administration.
Increased state subsidies for childcare
The current deal includes big wins for low-income families who receive state aid to pay for childcare.
Families earning more than 40% of the state’s median income now must pay a sliding monthly childcare fee, ranging from $36 to nearly $600, capped at 10% of income. For example, her family of four with a monthly income of $6,950 would pay $518 a month in family fees. Those fees were waived during the pandemic, but were due to resume on October 1.
The current budget waives fees for households earning less than 75% of the state’s median income, and limits all fees to 1% of monthly income for households earning more than that.
But the deal does not authorize the $1 billion rate hike for home care providers over 2023-2024 that Congress is seeking. Instead, it authorizes a total of $2.8 billion to fund increased payments to all childcare and kindergarten providers over two years. Details are subject to ongoing collective bargaining with the Child Care Providers Association, which represents California’s 40,000 home care providers.
Staff writers Hannah Wiley and Jenny Gold, and Sacramento Bureau Chief Laurel Rosenhall contributed to the report.
