Calif. Legislature Passes $96.3B Democratic Budget

SACRAMENTO, Calif. (AP) - California's Legislature has passed the state's massive spending plan amid sharp divisions over whether the Democratic budget will further the state's recovery or eventually return it to the multibillion-dollar deficits common during the recession.

The Senate and Assembly passed the main budget bill, AB110, on party-line votes Friday. The action came a day ahead of lawmakers' constitutional deadline to send a balanced budget to the governor.

Senate leader Darrell Steinberg says the $96.3 billion Democratic spending plan ends the "doom-and-gloom'' scenarios that were a hallmark of years past.

He says it contains more money for schools and begins to restore some of the social services cut or eliminated over the past few years.

Republican lawmakers say the budget for the fiscal year that starts in July contains accounting gimmicks and fails to address the state's debt.

The Legislature began passing California's massive state spending plan Friday amid sharp divisions over whether the compromise struck by Democrats and Gov. Jerry Brown will further the state's recovery or eventually return it to the multibillion-dollar deficits common during the recession.

Lawmakers have until midnight Saturday to send the governor a balanced budget and were expected to pass the main spending bill Friday. AB110 was approved on a 28-10 party-line vote in the Senate and had enough support to pass during an initial vote in the Assembly, which was expecting a final vote later in the day.

Senate leader Darrell Steinberg said the $96.3 billion Democratic spending plan ends the "doom-and-gloom'' scenarios that were a hallmark of years past, when deficits grew into the double digits, state programs were eliminated, workers were furloughed and budget deadlines were blown by weeks and sometimes months.

"The passage of the budget may just represent the end of one very difficult era and the beginning of a new and better era - an era of economic growth, hope and restoration,'' said Steinberg, a Democrat from Sacramento.

Republican lawmakers in both houses of the Legislature were not so enthusiastic. They said the spending plan contained accounting gimmicks and failed to address some of the state's most pressing fiscal time bombs, including tens of billions of dollars in unfunded public employee pension liabilities.

Republican Assemblyman Jeff Gorell also said it contains additional spending that will come back to hurt the state once the higher sales and income taxes passed by voters last fall expire.

"We will have to make cuts again,'' said Gorell, of Camarillo. "With this budget, we have positioned ourselves perfectly to repeat the mistakes of the past.''

Democrats can pass the budget on a simple majority vote and do not need Republicans' support. They noted that it maintains a roughly $1 billion reserve and will not restore all the programs cut during the recession.

It also funnels significantly more money to K-12 schools and alters the education funding formula so more money will flow to district with high levels of students who come from low-income families, who are not proficient in English or who are foster children. The funding shift was one of Brown's top legislative priorities of the year.

"Today we vote on a budget that marks a new beginning for California,'' said Democratic Assemblyman Bob Blumenfield, of Woodland Hills. "By passing this budget today, we can solidify California's recovery.''

Democratic lawmakers said they did not get the spending restorations they sought because the leadership agreed to go with the governor's more conservative estimates of tax revenue in the coming fiscal year, which starts July 1. They favor a revenue estimate offered by the nonpartisan Legislative Analyst's Office, which was $3.2 billion higher.

Many Democrats hope to reopen the budget after the first of the year if revenue does indeed come in ahead of the governor's estimate, but Brown has said he agreed to no such thing.

Among the objections raised by Republicans and even some Democratic lawmakers was a funding shift agreed to by the governor that transferred $500 million from an account funded by industry fines that is supposed to pay for the state's efforts to reduce greenhouse gas emissions. The money instead is being lent to the state's general fund.

Similar internal transfers from years past have left the state owing billions of dollars from its general fund to a variety of state programs. Republicans said this budget makes too little headway in repaying that money and in addressing the state's longer-term debts, primarily pensions and retiree health care obligations.

Republican Sen. Ted Gaines, of Rocklin, also noted that the state will be challenged to pay for the governor's high-speed rail and water-delivery projects, which have a combined price tag approaching $100 billion.

He asked lawmakers to think of the long term "so that we can grow the economy fast enough so we can address the unfunded obligations that we have.''