State budget skids in under deadline

Largest-ever budget includes increased education funding, controversial provisions

Rebecca Neipp

News Review Staff Writer

State budget skids in  under deadlineCalifornia legislators passed the state’s $214.8-billion spending plan for the coming fiscal year — just two days before the June 15 constitutional deadline — but remain in negotiations for the finer points of the Golden State’s largest-ever budget package.

While most of the proposed new taxes did not make their way into blueprint, conservatives continue to express opposition to the ever-increasing financial obligations on taxpayers.

“Year after year, Sacramento Democrats continue to push the envelope on spending,” said State Sen. Republican Leader Shannon Grove.

“The state budget has grown 100 percent in the last decade,” said Assemblyman Vince Fong. “Yet the most important issues facing our state are getting worse — whether it’s homelessness, our neighborhoods being littered with needles and waste, insufferable traffic congestion and the cost of living squeezing out the middle class.”

Soon after Gov. Gavin Newsom took office, he began proposing billions of dollars in new taxes — which Republicans and Democrats alike balked at, citing the current $21-billion surplus in the state coffers.

The legislature plans instead to divert hundreds of millions to pay down ballooning state pension liabilities and bring the state’s “Rainy Day” savings account up to $19 billion.

In keeping with state laws, education was the biggest recipient of funding in this budget, with nearly $102 billion allocated to K-14 classrooms and another $389 million to a reserve fund for schools.

While California still lags in per-pupil spending compared to other states (a figure particularly distorted by the high cost of living here), education advocates have expressed relief to see additional money going to public schools.

“We are still in the process of fully analyzing the impact of the state budget,” said Dr. David Ostash, who will be the new superintendent of Sierra Sands Unified School Districting starting July 1. However, he said, the budget is a moving target since some of the most important factors — including public employee pension contribution rates — keep changing.

“More specifically, for Sierra Sands, there are two variables that are positive,” he said.

“First, we anticipate an increase in student enrollment in the 2019-20 school year, and second, our unduplicated-pupil percentage is holding steady at approximately 62 percent, which triggers additional revenue for the district to increase or improve services for students who are either English learners, foster youth or socioeconomically disadvantaged.”

Among the more controversial provisions in the plan are the extension of MediCal coverage to some adults (regardless of immigration status) and the reinstatement of a penalty for failure to purchase health insurance.

The U.S. Supreme Court ruled, on a 5-4 vote, that the federal individual insurance mandate was classified as a tax. “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax,” Chief Justice John Roberts stated in the ruling.

However, some Californians have criticized Newsom’s introduction of the penalty as a “fee,” which skirts the state requirement of securing two-thirds legislative approval for a new tax.

Those who fail to procure insurance will be subject to an annual penalty of $695 or 2 percent of income, whichever is greater. The state Legislative Analyst’s Office estimates California will collect $1 billion in penalties over the next three years.

Newsom, along with his predecessor Jerry Brown, supports a new tax on water to fund improvements to the state’s infrastructure. Instead, the Cap and Trade program will be tapped to improve water systems.

Environmental groups are objecting to using money from the state’s system of controlling carbon emissions to fund water projects. However, those in favor of the plan say that alternatives to bringing water to an estimated 1 million Californians served by substandard water supplies will have adverse environmental impacts.

Legislators also set aside $2 billion to address the state’s housing crisis — though it is still unclear exactly where and how the money will be spent. An estimated $650 million will fund grants for cities and counties to address housing needs for the homeless and displaced.

Grove said that she is disappointed that millions of dollars in “pet projects” will continue to increase the burden on working-class families.

“A lot more work needs to be done to make California affordable for families, but it doesn’t start with new taxes.”

Starting July 1 California drivers will see their fuel costs in crease again — resulting in another $850 million coming from taxpayers. In addition, businesses will pay an additional $3 billion in taxes over the next two years.

“Unaccountable government bureaucracy continues to grow and taxpayers get the bill,” said Fong. “This is unacceptable. Californians are rightfully tired of paying more and getting less. This budget only reinforces Sacramento’s irresponsible and unsustainable tax-and-spend behavior.”

Majority party leadership will continue negotiations with the governor, who still needs to sign the budget.

At press time, the final budget had not yet been uploaded to www.ebudget.ca.gov.

Story First Published: 2019-06-21