California lawmakers approve $ 262.5 billion budget plan restoring cuts made during pandemic – CBS San Francisco

SACRAMENTO, Calif. (AP) – In some ways, the new spending plan approved by the California legislature on Monday is about going back to a time before the pandemic, when California’s roaring economy fueled budget surpluses.

The $ 262.6 billion proposal now underway for Gov. Gavin Newsom’s office would restore spending cuts to public schools, colleges and universities, courts, child support services and employee salaries the state – all of which were slashed last year when state officials believed they were facing a record budget deficit from the coronavirus.

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Instead, state revenues climbed more than 27%, the biggest year-over-year increase in more than four decades. This includes roughly $ 100 billion in new money, coming from both a state surplus and federal coronavirus aid. It’s so much money the state plans to give rebates of up to $ 1,100 to more than 15 million households while pledging to pay for every 4-year-old to attend kindergarten for free and ensuring government-funded health coverage for low-income people. immigrants aged 50 and over living illegally in the country.

“This budget is not bringing us back to normal because it was not our intention,” said Congressman Joaquin Arambula, a Democrat from Fresno. “Instead, it brings us to a better place by making transformative change for Californians.”

Democrats in charge of the state legislature are said to have spent even more money over time, but Newsom – who will face a recall election later this year – convinced them to take a more cautious approach that relies more on one-time rather than multi-year spending. commitments.

This means the state will not spend $ 200 million this year to hire more people in local public health departments in the aftermath of the pandemic. Instead, the Newsom administration has pledged to spend $ 300 million next year. The Newsom administration said the money was not needed this year, in part because the federal government is giving California $ 1.8 billion for public health, with most of that money going for vaccines. and coronavirus testing.

Still, Democrats have complained about missing the opportunity to bolster local public health services, many of which have been overwhelmed by the pandemic. State Senator Richard Pan, a pediatrician and Democrat of Sacramento, said he wanted the Newsom administration to do more than just “spend the whole year planning.”

“We already know some of our weaknesses from the pandemic,” he said.

Republicans, meanwhile, complained about a tax increase on businesses with 500 or more employees. The hike would more than double an environmental tax that primarily goes into two funds to pay for the cleanup of hazardous waste sites statewide.

The budget eliminates fees for companies with less than 100 employees and keeps them the same for 100 to 499 workers.

State Senator Shannon Grove, Republican from Bakersfield, said raising taxes would discourage companies from hiring more people for fear of getting too big and having to pay much higher fees.

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“Why do we punish employers who hire people? ” she said.

The tax hike required a two-thirds vote in the legislature, a task made easier by Democrats controlling enough seats that they did not need Republican votes. Bell Gardens Democrat Cristina Garcia said large employers were part of the negotiations on the bill and agreed to pay higher taxes “because they understand that for a long time they have not paid their fair share. go”.

“Not paying their fair share means communities like mine are treated like we are wasteland and disposable and it’s okay to let us get sicker,” said Garcia, who represents the contaminated communities. by lead from a nearby battery factory.

The budget also pledges more than $ 276 million to help the Department of Employment Development deal more quickly with its backlog of jobless claims, currently affecting more than 230,000 people.

In the past year, California paid out $ 153 billion in unemployment benefits, including billions in fraudulent payments to inmates and others ineligible. The state quickly ran out of money to pay for benefits and had to take out a loan from the federal government to pay the rest.

The state’s debt is approaching $ 24 billion, all to be repaid to the federal government with interest. But the budget does not include money to start paying down the debt.

The federal government has canceled the state’s interest payments until September, and the Newsom administration hopes they will forgive more in the future. But it took the state seven years to repay a much smaller loan after the Great Recession more than a decade ago. The Office of the Legislative Analyst estimates that interest payments on this current debt could cost the state between $ 2.5 billion and $ 5 billion over the next decade.

“I don’t understand how $ 2.5 billion to $ 5 billion is not a priority for this administration,” said MP Suzette Martinez Valladares, a Republican from Santa Clarita.

Erika Li, deputy head of the California Department of Finance, said debt “is a priority for this administration.”

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“This is something that we are working on and will continue to work on,” she said.