Let’s make a deal: What to know about the California budget
California lawmakers are set to adopt a $300 billion budget this week that will provide refunds to most taxpayers in the state, pour resources into expanding abortion access and extend health care to more undocumented immigrants.
The state spending plan, which has grown to a record size as the economy recovered faster than anticipated from the coronavirus pandemic, is expected to be adopted before the start of the fiscal year on Friday, after Gov. Gavin Newsom and legislative leaders announced a deal on Sunday night.
Negotiations dragged on for several weeks as Newsom bargained with the Democratic leaders of the state Senate and Assembly over whether to tie the tax relief to car ownership; funding increases for universities, housing and social safety net programs; the details of a major climate package; and a plan that would give state regulators more control in approving clean energy projects.
The final agreement — which includes $234.4 billion in general fund spending and which legislative budget committees began debating today — is similar in many ways to a placeholder budget that the Legislature passed earlier this month to meet a constitutional deadline.
But at Newsom’s insistence, new spending commitments were slashed by several billion dollars and some appropriations will only be triggered in future years if revenue estimates hold up. As the state eyes another potential economic downturn, reserves will grow to nearly $38 billion, including more than $23 billion in the general rainy-day fund.
With tax revenues surging, driven by massive income gains among the wealthiest Californians, state leaders maneuvered to avoid the Gann Limit, an obscure provision that prohibits spending above a certain level per capita. Increased infrastructure and emergency expenditures, which are exempt in certain circumstances, as well as the tax refunds, will keep the state below the limit for the next few years. The Legislature is now considering placing a measure before voters on the 2024 ballot that would loosen the Gann Limit restrictions.
The tax rebate program, which has been publicly debated for months, is the centerpiece of the budget deal. Under the $9.5 billion plan, more than 95% of taxpayers — those making as much as $250,000 a year, or $500,000 if they file jointly — will receive a payment this fall. The amounts vary based on income and whether the recipients have dependents, so a low-income family with children will receive $1,050, while a single taxpayer with a higher income will receive just $200.
To reach Californians who do not file taxes, the state will also increase Supplemental Social Security grants by about $39 per month for individuals and $100 for couples, while welfare grants through CalWORKs will increase by an additional 10 percent for the next two years.
Here are other significant aspects of the budget deal:
Investing in abortion access
The state budget deal cemented Democrats’ commitment to supporting abortion access in California, investing $205 million to improve reproductive health care infrastructure and to ensure people seeking abortions can get to clinics.
The agreement earmarked $40 million in one-time funds to subsidize the cost of providing abortions to low-income or uninsured patients, including those who come from out of state. The deal also commits $20 million over three years to create the California Abortion Support Fund, which would hand out grants to women who need help paying for travel, lodging, child care and other expenses that advocates say prevent many low-income women from accessing abortion services.
More than $60 million will go towards shoring up the health care workforce by training more clinicians in abortion care and defraying higher education costs for future clinicians that commit to providing reproductive health services.
Other elements of the spending deal support a 15-bill package moving through the Legislature to expand abortion access. This includes one-time payments of $20 million for abortion clinics to improve physicial and digital security, $10 million for family planning services and $15 million for community-based organizations to improve sexual and reproductive health education. An additional $15 million in ongoing funds will go to Medi-Cal providers that perform abortions.
— Kristen Hwang
Extending the social safety net
The budget deal expands social spending, including by extending state health coverage to low-income undocumented immigrants of all ages and food assistance to immigrants ages 55 and older, who are currently excluded from the CalFresh program. The state would become the first in the nation to extend state food assistance to such immigrants.