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California lawmakers pass their proposed budget, negotiations continue with Newsom

Thursday's action ensures California lawmakers get paid, which is tied to a constitutional deadline by midnight Thursday to pass the budget act.

California lawmakers pass their proposed budget, negotiations continue with Newsom

Thursday's action ensures California lawmakers get paid, which is tied to a constitutional deadline by midnight Thursday to pass the budget act.

IN DOWNTOWN SACRAMENTO WHERE LAWMAKERS AND THE GOVERNOR CONTINUE TO NEGOTIATE THE STATE SPENDING PLAN. AND TODAY, THE LEGISLATURE PASSED THEIR PROPOSED VERSION. KCRA THREE CAPITOL CORRESPONDENT ASHLEY ZAVALA JOINS US FROM THE NEWSROOM RIGHT NOW TO EXPLAIN TODAY’S ACTION AND SOME OF THE STICKING POINTS IN THOSE NEGOTIATIONS. TAI AND LISA, WHAT LAWMAKERS PASSED TODAY IS A PLACEHOLDER FOR THE ACTUAL STATE SPENDING PLAN THAT STILL NEEDS TO BE WORKED OUT BETWEEN THE LEGISLATURE AND GOVERNOR. AS YOU MENTIONED, THE PLAN PASSED TODAY ENSURES LAWMAKERS GET PAID IN ORDER TO DO SO, THEY NEEDED TO PASS THEIR VERSION OF THE STATE SPENDING PLAN BY MIDNIGHT TONIGHT. SO THIS IS STILL A MASSIVE BUDGET. IT’S $312 BILLION. THE MAIN ISSUE THIS YEAR IS THAT LAWMAKERS AND THE GOVERNOR NEED TO GRAPPLE WITH A SIGNIFICANT BUDGET SHORTFALL FOR THE FIRST TIME IN ABOUT A DECADE. THE LEGISLATIVE VERSION COVERS A $30.7 BILLION BUDGET GAP, EVEN THOUGH THE GOVERNOR AND LEGISLATIVE ANALYST OFFICE HAVE SAID THAT THE SHORTFALL IS LARGER THAN THAT. THE PLAN DOES NOT INCLUDE ANY TAX INCREASES ON INDIVIDUAL CALIFORNIANS OR BUSINESSES. IT ALSO DOES NOT REQUIRE THE STATE TO PULL FROM THE RAINY DAY FUND. THE PROPOSAL EARMARKS AN ADDITIONAL $1 BILLION IN GRANTS FOR CITIES AND COUNTIES TO ADDRESS HOMELESSNESS. IT ALSO MAINTAINS TRANSPORTATION FUNDS THAT THE GOVERNOR WANTED TO CUT, PLUS PROVIDE AN ADDITIONAL $1.1 BILLION OVER THE NEXT THREE YEARS FOR STRUGGLING SYSTEMS LIKE BART, FOR EXAMPLE, TO CONTINUE OPERATING A CHALLENGE FOR THIS YEAR’S BUDGET IS THE EXTENDED OCTOBER TAX DEADLINE. USUALLY AT THIS TIME OF YEAR, LAWMAKERS AND THE GOVERNOR HAVE AN IDEA OF THE MONEY THAT THEY’RE WORKING WITH TO FINALIZE THE STATE SPENDING PLAN. BUT THIS YEAR, BECAUSE OF WINTER STORMS, THE DEADLINE WAS EXTENDED FROM APRIL TO OCTOBER. THIS MEANS ABOUT $40 BILLION IS IN LIMBO. OVERALL. ALL DEMOCRATS SAY THIS PLAN IS RESPONSIBLE, WHILE REPUBLICANS SAY IT COULD DRIVE CALIFORNIA INTO DEBT BUDGET. THAT EMBODIES OUR CORE VALUES AND DEFENDS OUR PRINCIPLES. WE WERE ABLE TO DO THAT BECAUSE WE WE BUILT SMART BUDGETS IN RECENT YEARS. WE KNEW THAT TOUGH TIMES WOULD COME. WE JUST DIDN’T KNOW WHEN. GUESS WHAT THEY’RE HERE WITH. SO MUCH UNCERTAINTY ON THE HORIZON NOW, NOW IS A TIME FOR PRUDENCE AND INPUT FROM BOTH SIDES. THIS FRAMEWORK IS STILL INCOMPLETE, HAS STRUCTURAL DEFICITS FOR YEARS TO COME, AND IT FAILS TO MAKE NEEDED INVESTMENTS. CALIFORNIA SIMPLY CANNOT AFFORD THIS SPENDING PLAN. SO LAWMAKERS AND THE GOVERNOR ARE AT ODDS OVER A HANDFUL OF ISSUES. THAT INCLUDES FUNDING FOR PUBLIC TRANSPORTATION AND THE GOVERNOR’S PUSH TO SPEED UP INFRASTRUCTURE AND ENERGY PROJECTS BY CUTTING DOWN THE PROCESS AND PAPERWORK FOR CALIFORNIA’S ENVIRONMENTAL LAWS. THEY’LL NEED TO COME TO A COMPROMISE ON ALL OF THIS BY JULY 1ST. BACK TO YOU. WELL, AND ACTUALLY, THEY HAVE TWO WEEKS TO COME TO A DEAL BEFORE THE NEW FISCAL YEAR STARTS. JULY 1ST IS THAT DEADLINE. SO WHAT ARE SOME OF THE ISSUES THEY NEED TO COMPROMISE ON? YEAH, SO LAWMAKERS AND THE GOVERNOR ARE STILL AT ODDS OVER A HANDFUL OF ISSUES, INCLUDING PUBLIC TRANSPORTATION FUNDS, WHICH, AS WE MENTIONED, THE LEGISLATURE WOULD LIKE TO ALLOCATE THOSE FUNDS THAT THE GOVERNOR HAS PROPOSED CUTTING. ALSO, THE GOVERNOR’S PUSH TO CUT DOWN THE PROCESS AND PAPERWORK FOR INFRASTRUCTURE AND ENERGY PROJECTS THAT TYPICALLY ARE HELD UP OR TIED UP BECAUSE OF CALIFORNIA ENVIRONMENTAL LAWS. HE WOULD LIKE TO FAST TRACK THIS PROPOSAL SO THAT IT GOES INTO EFFECT IMMEDIATELY, ALONG WITH THE BUDGET, CALIFORNIA LAWMAKERS HAVE SAID THEY NEED MORE TIME TO DIGEST THAT PLAN. BUT OVERALL, THEY’LL NEED TO COME TO A COMPROMISE ON ALL OF THIS PRETT
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California lawmakers pass their proposed budget, negotiations continue with Newsom

Thursday's action ensures California lawmakers get paid, which is tied to a constitutional deadline by midnight Thursday to pass the budget act.

California lawmakers on Thursday passed the Legislature's version of the budget as Democratic leaders continue to negotiate the final state spending plan with Gov. Gavin Newsom. Thursday's action ensures California lawmakers get paid, which is tied to a constitutional deadline by midnight Thursday to pass the budget act. The plan represents a deal struck among California's Democratic lawmakers and passed on party-line votes in both the Senate and Assembly. For the first time in about a decade, California lawmakers and the governor are grappling with a significant budget shortfall in the tens of billions of dollars. The $312 billion spending plan passed Thursday covers a $30.7 billion gap, despite Newsom's administration and the Legislative Analyst Office noting the budget problem would be bigger. The plan mirrors many parts of Newsom's proposed version of the budget presented in May, with no cuts to core programs and increased spending for education, health and flood protection. The Legislative Analyst Office noted the legislative plan involves more borrowing and cost shifts than Newsom's proposal. “What we have is a budget that embodies our core values and defends our principles," said Assembly Speaker Anthony Rendon. "We were able to do that because we built smart budgets in recent years. We knew tough times would come; we didn’t know when."The legislative plan does not involve any tax increases on individual Californians or businesses and does not involve any withdrawals from the state's $37 billion rainy day fund, despite Democratic efforts earlier this year to use these strategies to fill the budget gap. Newsom publicly rejected both ideas in May. California lawmakers and the governor's spending plan will be finalized with an incomplete picture, because Califorina's tax filing deadline was extended to October. This means about $40 billion of expected revenue is in limbo. Republican lawmakers criticized the plan passed Thursday."With so much uncertainty on the horizon, now is the time for prudence and input from both sides," said Assemblyman Vince Fong, R-Bakersfield. "California can simply not afford this spending plan." As negotiations continue, lawmakers and the governor are still at odds over a handful of issues, including funding for public transportation. The governor has proposed cutting $2 billion already earmarked for local rail. The Legislature wants to keep the money in place while adding an extra $1.1 billion over the next three years to prevent what some Democrats have warned would be a "death spiral" for transit systems such as BART.Another sticking point between Newsom and lawmakers is the governor's proposal to cut down on the paperwork and process for energy and transportation projects in California, which are typically held up and drawn out in court as a result of California's environmental laws. Newsom has said he wants to move his proposal with a sense of urgency by using the expedited budget trailer bill process that would allow it to go into effect immediately once approved. Democrats have said they need more time to digest the plan. With the new fiscal year starting July 1, lawmakers and the governor have two weeks to come to a compromise.

California lawmakers on Thursday passed the Legislature's version of the budget as Democratic leaders continue to negotiate the final state spending plan with Gov. Gavin Newsom.

Thursday's action ensures California lawmakers get paid, which is tied to a constitutional deadline by midnight Thursday to pass the budget act. The plan represents a deal struck among California's Democratic lawmakers and passed on party-line votes in both the Senate and Assembly.

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For the first time in about a decade, California lawmakers and the governor are grappling with a significant budget shortfall in the tens of billions of dollars. The $312 billion spending plan passed Thursday covers a $30.7 billion gap, despite Newsom's administration and the Legislative Analyst Office noting the budget problem would be bigger.

The plan mirrors many parts of Newsom's proposed version of the budget presented in May, with no cuts to core programs and increased spending for education, health and flood protection. The Legislative Analyst Office noted the legislative plan involves more borrowing and cost shifts than Newsom's proposal.

“What we have is a budget that embodies our core values and defends our principles," said Assembly Speaker Anthony Rendon. "We were able to do that because we built smart budgets in recent years. We knew tough times would come; we didn’t know when."

The legislative plan does not involve any tax increases on individual Californians or businesses and does not involve any withdrawals from the state's $37 billion rainy day fund, despite Democratic efforts earlier this year to use these strategies to fill the budget gap. Newsom publicly rejected both ideas in May.

California lawmakers and the governor's spending plan will be finalized with an incomplete picture, because Califorina's tax filing deadline was extended to October. This means about $40 billion of expected revenue is in limbo. Republican lawmakers criticized the plan passed Thursday.

"With so much uncertainty on the horizon, now is the time for prudence and input from both sides," said Assemblyman Vince Fong, R-Bakersfield. "California can simply not afford this spending plan."

As negotiations continue, lawmakers and the governor are still at odds over a handful of issues, including funding for public transportation. The governor has proposed cutting $2 billion already earmarked for local rail. The Legislature wants to keep the money in place while adding an extra $1.1 billion over the next three years to prevent what some Democrats have warned would be a "death spiral" for transit systems such as BART.

Another sticking point between Newsom and lawmakers is the governor's proposal to cut down on the paperwork and process for energy and transportation projects in California, which are typically held up and drawn out in court as a result of California's environmental laws. Newsom has said he wants to move his proposal with a sense of urgency by using the expedited budget trailer bill process that would allow it to go into effect immediately once approved. Democrats have said they need more time to digest the plan.

With the new fiscal year starting July 1, lawmakers and the governor have two weeks to come to a compromise.