Democrats: use state budget surplus on schools, poor

2:25 PM, Dec 11, 2013   |    comments
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Assembly Democrats want to spend some $3.5 billion of California's anticipated budget surplus on programs they say will help restore recent cuts -- from a full roll-out of transitional kindergarten to higher reimbursement rates for doctors who accept low-income patients.

Those proposals are laid out in general form in a budget 'blueprint' the majority party quietly released on Wednesday. Budget staff says details would have to be worked out during public hearings following Gov. Jerry Brown's budget unveiling next month.

"We want to continue this stability of state finances, but we also want to grow opportunity," said Assembly Speaker John Pérez, D-Los Angeles, in an interview.

The announcement comes just three weeks after the Legislature's independent analysts projected multi-billion dollar budget surpluses in the years to come, thanks to an improving economy and the 2012 passage of temporary tax hikes by voters.

How that money will be spent -- or not -- is shaping up to be the biggest debate of 2014 at the state Capitol.

While Assembly Democrats said Wednesday that they support a sizable reserve of $2 billion in the budget year that begins next July 1, they also laid out a number of ways to spend more than half of the currently projected surplus.

Most notably, their 'blueprint' calls for full implementation of transitional kindergarten, which gives four-year olds a guaranteed educational program in the state's shift of age requirements for traditional kindergarten.  The program began in 2013 under a staggered three-year implementation pushed for by Governor Brown during 2012 budget negotiations.  While many school districts have signed on, Democratic legislative staffers estimate that only about 25 percent of California's four-year olds are currently being served.

Expansion, though, may not be cheap.  One 2012 legislative analysis estimated the full cost of transitional kindergarten at $675 million a year.

Assembly Democrats also want to increase state funding for the University of California and California State University systems, the budgets of which have been restrained during the past few years by lawmakers.  UC regents, in particular, have already identified the need for more money.

"Increased state funding," said Patrick Lenz, UC's vice president for budget and capital resources, "will address enrollment growth -- potentially adding an additional 2,200 freshmen and community college transfers."

Democrats in the Assembly say they will also seek to expand the amount of income that's not counted towards eligibility for welfare-to-work assistance under the CalWORKS program.  That 'disregarded income' level was increased this year, and Democrats say a further boost will allow more low-income families to temporarily qualify for welfare assistance -- thus taking aim at what recent reports say is a steady growth in child poverty across California.

The Democratic budget outline also calls for raising the state's reimbursement rate for doctors who treat low-income patients through the Medi-Cal program.  Those rates, among the lowest in the nation, were the focus of intense Capitol debate this year, with doctors saying they could no longer afford to treat poor patients.  The pool of Medi-Cal patients is expected to grow substantially in the next few years under an expansion called for in the federal Affordable Care Act.

But restoring recent cuts to the Medi-Cal provider rate is costly; in the 2013 budget debate, its price tag was placed at close to $1 billion a year.  The Assembly Democratic budget plan doesn't specify how much money it would restore, saying it would be a "phase in" of higher provider rates.

"We've got to get [rates] up to an appropriate level over time, so we can have broad access to health care," said Speaker Pérez.

The wish list of Democrats also includes more money for mental health programs; payment of some deferred costs set aside by lawmakers during the recession; and spend money on one-time projects from clean energy to new parks in an effort to avoid making long-term commitments with dollars that may not last into the future.

Brown's budget team say the governor is now in the process of finalizing his spending priorities, and didn't react to any of the Assembly Democratic ideas.

"The two guiding principles governing his decision making process," said budget spokesman H.D. Palmer, "are paying down budgetary borrowing and building up a significant budget reserve."


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