California’s Legislature has never seen a week quite like this one – a new state budget and a new Assembly Speaker in the span of only a few days.
Legislative leaders reached an agreement late Monday night with Gov. Gavin Newsom on a $310 billion budget for the fiscal year that begins July 1. And Assemblymember Robert Rivas – the Speaker in Waiting – is scheduled to take the gavel from outgoing Speaker Anthony Rendon on Friday.
Here are some insights from Team LPA on developments around both the budget and the new Speaker:
After weeks of closed-door negotiations, Newsom, Rendon and Senate Leader Toni Atkins came to terms on a budget that seeks to bridge a $32 billion budget shortfall with a combination of budget cuts, spending delays, cost shifts and a bit of new revenue.
The plan mostly relies on economic and revenue assumptions from Newsom’s Department of Finance, which are more optimistic than those from the non-partisan Legislative Analyst. That move buys everyone time to see who is right about future tax revenues and adjust spending if necessary, likely in January. And the spending plan includes a record $38 billion in reserves in case the more pessimistic revenue scenarios come to pass.
A few key points that broke the deadlock:
- The Legislature will give Newsom most of the reforms he was seeking to speed up the construction of crucial state infrastructure. In exchange, Newsom agreed to drop a provision requiring those changes also apply to the controversial tunnel he wants to build to move Northern California water through the Delta to the Central Valley and Southern California.
- The budget declares the state’s intent to provide two years of funding for local governments to battle homelessness. Legislative leaders were sympathetic to local requests for permanent funding, which they say is necessary for them to make real progress. Newsom wanted to commit to just one year. The agreement splits the difference with one year guaranteed and an unbinding commitment to a second year.
- The plan promises a big boost for health care, with higher subsidies for middle-income enrollees in Affordable Care Act plans and increased reimbursements for doctors who treat low-income patients through Medi-Cal. Those reimbursements will be financed through adoption of a tax on managed care plans that will trigger more matching funds from the federal government.
- Transit riders will get some relief from about $5 billion in funds that the budget sets aside for bus and rail agencies. That won’t be enough to solve all of the much-discussed “fiscal cliff” at BART, so Bay Area leaders are pushing for separate legislation that would raise tolls on the region’s bridges to provide BART with increased funding.
Rivas, the grandchild of Mexican immigrants who was raised in farmworker housing by a single mother, overcame a childhood stutter that left him almost unable to speak. He went on to earn a bachelor’s degree from Sacramento State University and a Master’s from San Jose State and served two terms on the San Benito County Board of Supervisors before being elected to the Assembly.
He is the first Speaker in state history to take the Assembly reins in late June, while the house’s policy committees are still mulling hundreds of Senate bills passed by the upper house earlier this month.
Capitol insiders will be watching to see how quickly Rivas appoints new committee chairs and/or members, since a mid-stream change of committee leadership or membership could shape the fate of many of those bills.
With the deadline for policy committee action just two weeks away, it’s also possible that Rivas could leave most of those members in place for now while considering changes in the powerful Appropriations Committee, which has until Sept. 1 to accept or reject any bill with a fiscal impact.