California Gov. Jerry Brown and Democratic legislative leaders said Tuesday they have agreed to a $125 billion budget that would expand a tax credit for the working poor, increase spending on safety net programs and boost payments for doctors and dentists.
The budget agreement sets up votes in the state Senate and Assembly on Thursday, the last day for lawmakers to approve a budget without losing pay under a voter-approved measure that withholds lawmakers' paychecks if they don't meet budget deadlines.
The spending plan, which Brown called "balanced and progressive," also includes a one-time payment to the state's largest public-employee pension fund and more money for higher education. It does not reverse spending agreed to last year, as Brown had proposed.
"This budget keeps California on a sound fiscal path and continues to support struggling families and make investments in our schools," Brown said in a statement.
Brown negotiated the deal with Assembly Speaker Anthony Rendon, D-Paramount, and Senate President Pro Tem Kevin de Leon, D-Los Angeles. The $125 billion price tag represents general fund spending. When bonds and special funds are included, the budget is $183 billion.
Democratic lawmakers celebrated expanded funding for social services.
More people will become eligible for the Earned Income Tax Credit, which provides a cash injection for the working poor. The deal will allow people with an income up to about $22,000 to qualify, up from $14,161 for adults with three or more children. It also will allow people to qualify even if their income is from self-employment, such as driving for ride-sharing companies.
Doctors and dentists will get a raise through an agreement between Brown and lawmakers on spending $1.2 billion in revenue from a tobacco tax hike approved by voters last year. About half the money will go to health care providers, including $465 million for doctors and dentists who treat low-income patients on the state's Medi-Cal health insurance program for the needy and $50 million for family planning providers including Planned Parenthood.
The higher payments, which would be matched by federal funds, are subject to approval by President Donald Trump's administration.
Brown preferred to use the tobacco tax money to cover general growth in Medi-Cal costs, but lawmakers said the proposal would renege on promises made to voters.
"It's critically important that we respond to the will of the voters, and the voters stepped up and said, 'We think it's important to build a strong core infrastructure of health care delivery,' " said Sen. Holly Mitchell, who leads the Senate Budget Committee.
The budget also would restore full dental and eyeglass benefits that were cut from Medi-Cal during the Great Recession.
About $100 million will go to software, personnel and other costs of preparing for the start of marijuana sales to adults over 21. The state will create a tax office in California's North Coast region, from San Francisco to the border with Oregon, a prime area for growing marijuana, so farmers can conveniently file their taxes.
The budget agreement does not authorize an extension of the cap-and-trade program, which Brown had hoped to include. The program puts a limit on the state's total annual emissions from certain sources and requires businesses to buy permits in order to release greenhouse gases from certain sources. The governor said he is confident he can reach an agreement to keep the state's signature effort to fight climate change past 2020, when it's now set to expire.
Legislative leaders said they were committed to extending the program, but they did not share Brown's urgency.
Reauthorizing it "doesn't necessarily need to get done this year," Rendon said.