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California lawmakers voted Monday night to approve a record state budget that reflects new deals with Gov. Gavin Newsom to extend health care to undocumented migrants, spend billions to reduce homelessness and help Californians who are still fighting the pandemic.
The $ 262.6 billion spending plan for the fiscal year that begins July 1 was fueled by a state surplus of $ 76 billion and $ 27 billion in federal aid. Democrats who control the Capitol wanted to use the windfall to help the state recover from the crisis coronavirus pandemic and its uneven toll on Californians.
As the state’s top earners continued to get richer thanks to a strong stock market, a booming tech sector, and rising home values, low-wage Californians suffered job losses. jobs, cuts in child care and a dysfunctional unemployment insurance system. The state’s progressive tax structure has allowed Newsom and lawmakers to inject social service programs for the middle and needy classes with billions of dollars coming largely from wealthy taxpayers.
“We are investing this in the unprecedented challenges facing the state, including meeting the needs of people who work hard, play by the rules and barely make ends meet,” Newsom said on Friday.
The pandemic and its economic impacts have not only colored the state’s budget negotiations – they have also disrupted California’s political landscape this year, prompting a GOP-backed effort to topple Newsom. With the reminder now qualified to strike the ballot, electoral politics have also loomed over budget negotiations this year.
Here are five things to know about California’s new spending plan:
Even with the record hugeness of this year’s budget and Democrats holding all power in Sacramento, Newsom and the legislative leaders have not been able to come to an agreement on everything. They have not issued public statements announcing a broad budget deal, although bills were printed on Friday reflecting new deals that change the budget for legislators approved on June 14.
The absence of the usual bravado indicates that even if this budget meets the legal requirements to develop a spending plan by July 1, important negotiations will continue. Some key expenses will likely be approved later this summer through a special type of legislation known as “budget tracking tickets”.
For example, they haven’t decided exactly how to spend billions of dollars to deal with the threats posed by wildfires and drought. The budget includes $ 1 billion over several years for forest fire prevention, $ 3 billion to alleviate drought and $ 3.7 billion over three years to mitigate the dangers posed by climate change – but Newsom and the legislative leaders are always looking to spend the funds.
There is no spending in the budget for the controversial high-speed train project in California that aims to connect San Francisco and Los Angeles. Newsom in May proposed spend $ 4.2 billion in bond funds to complete construction in the central valley – which critics ridicule as a ‘train to nowhere’ – and are heading towards the launch of a service between Merced and Bakersfield. But lawmakers pushed back and left the money out of budget.
“We just seem to be at loggerheads with elements in the administration on how much of the plan to fund,” Assembly Speaker Anthony Rendon told CalMatters.
Lawmakers and Newsom also failed to agree on how to expand broadband service in California, an infrastructure need that became evident during the pandemic as millions of people turned to remote school and work, but suffered from poor internet connections. The budget includes $ 6 billion to expand broadband service, but the details remain to be clarified.
When he ran for office in 2018, “Governor Dad” Newsom campaigned heavily for his support for families and early childhood education. But childcare, including pay rates for some providers, was a final sticking point in budget negotiations, Rendon told reporters. And many details remain to be settled.
A key point was settled on Friday: In a first-ever deal with the new supplier union, the state approved the first pay rate hike in five years, as well as funding to train and certify more suppliers, according to a union press release, whose increases of at least 15% would start in 2022.
United Child Care Providers – recognized as a union in 2019 bill signed by Newsom – held a rally on Capitol Hill Thursday, attended by Rendon and Senate Leader Toni Atkins, to pressure the governor to adhere to the legislative proposal which provided for an additional $ 1 billion for salary increases.
Newsom’s team had backed down, officials close to budget talks said Politics, expressing concerns about the impact of the rate hike when the government does not have excess liquidity.
The pay rate hike comes at a time when the California child care industry has been hit hard: During the pandemic, around 8,500 licensees closed childcare sites. It has taken tens of thousands of niches for children in need of care while their parents are working or going to school – and has also taken jobs from thousands of women of color, who make up the majority of the workforce. -work in daycare.
The agreement also increases the number of available child care spaces by 200,000 over the next four years, including 120,000 in 2021-2022.
California took another step towards achieving universal health care with this budget, as Newsom and lawmakers agreed to offer Medi-Cal health insurance undocumented residents aged 50 and over.
This is the latest expansion of efforts in years by Democrats to allow unauthorized immigrants to participate in the state-funded health care program for low-income residents. Previous budgets opened the program to undocumented children and then to 26-year-old young adults.
This year, Newsom proposed to make undocumented residents aged 60 and over eligible for Medi-Cal, while the legislature wanted to offer it to people 50 and over. A key sticking point: Covering health care for more people commits the state to ongoing spending that it may not be able to afford in a future recession.
Advocates said this budget makes California the first state in the country to provide government health insurance to undocumented immigrants at the age of 50. It also eliminates an earlier rule that required people to ineligible for Medi-Cal if they had a small amount of savings in the bank.
Also, local public health departments – tired after a year of managing COVID-19 tests, vaccinations and residents irritated by business closures – obtained new funding in the budget.
Newsom did not initially offer significant funding to rebuild the state’s public health infrastructure, but the legislature wanted to give local public health departments an additional $ 200 million per year to add staff and modernize equipment. . In the end, the budget gives them $ 300 million a year, but delays payments until 2022.
Legislative leaders and Newsom were on the same page about how much to spend on homelessness and affordable housing – a total of $ 12 billion over the next two years. But they made some concessions on exactly how to spend all those billions.
In its budget proposal, the Legislature made permanent funding a top priority. They have provided four years of consistent funding, to the tune of $ 1 billion a year, to cities and counties to fight homelessness. The key was flexibility, as local courts would be able to decide what exactly would be most effective. The governor had proposed no money for this.
The compromise was split in two: two years instead of four, $ 1 billion per year for local jurisdictions. It’s still the biggest homeless fundraiser in California to date. Funding will be reassessed in year three, and rules have yet to be worked out on who will get this money and how they will have to spend it to ensure accountability and results.
The budget deal also includes $ 1.75 billion to build ready-to-go affordable housing projects, $ 300 million to preserve existing affordable rental housing and $ 130 million to build and maintain housing for farm workers.
Earlier on Friday, Newsom and legislative leaders announced a deal for extend the moratorium on evictions statewide until September 30 and try to accelerate rent relief by using $ 5.2 billion from the federal government.
As California recovers from the pandemic and Newsom’s job approval rises in public polls, Democrats push for ballot recall earlier rather than later. They included $ 250 million in the budget to cover the cost of holding the special election to help speed up the process. They also wrote a budget bill that sets the stage for an earlier election date allowing the legislature to skip a 30-day financial review period if it has already set aside money to cover election costs. The date is still not set, but an election in September looks increasingly likely.
And as Newsom fights to keep his job, he has used the budget process to show voters his priorities. In May, he stormed the state, announces multi-billion dollar budget nuggets in all major media markets as he claimed California was “coming back” from the pandemic. In June, he launched the first television commercials of its anti-recall campaign – with the same “backwards” branding and a focus on the same budget items: funding to house 65,000 homeless people, $ 600 in stimulus payments for most Californians and $ 4 billion in grants for small enterprises.
“Newsom delivers money to your pocket”, the ad says. “And free kindergarten for every California child, regardless of income.”
Republicans – who spent months blasting Newsom’s response to the pandemic – criticized the governor for “throwing away taxpayer money to the multitude of problems he created in the first place. “