California legislators approve budget bill, will continue negotiations with Newsom

California lawmakers voted Thursday to approve an amended version of the 2023 state budget bill but will continue discussing the final terms of the legislation with Gov. Gavin Newsom (D).

The $311.7 billion spending plan, which materialized earlier this week, is the result of extensive negotiations among state Assembly and state Senate Democrats.

Per California’s state constitution, the lawmakers were required to pass a budget by midnight on June 15 to continue receiving their salaries.

Newsom must sign a budget into law by July 1. The Democratic lawmakers said they will continue negotiating the final terms of the legislation with the governor ahead of that date.

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The main point of contention between Newsom and his Democratic colleagues is the governor’s push to streamline major infrastructure projects and reduce regulatory red tape. Amendments to the budget can occur through what is known in California as “budget trailer bills.”

“This Protect Our Progress budget is a result of months of work and partnership in [the] Senate and Assembly,” state Sen. Nancy Skinner (D), chairwoman of the Senate Budget Committee, tweeted Thursday.

The bill, Skinner explained, contains “essential funding to safeguard the progress we’ve made to create a more equitable economy for all.”

The legislature’s bill, which slightly varies from Newsom’s May proposal, includes $227 billion from the state’s general fund and $30.7 billion in solutions to close California’s budget deficit, as well as general fund reserves of $37.2 billion.

At the core of the bill is the protection of recent state progress — bolstering funding for education and health care, without introducing ongoing cuts to core programs or middle-class tax increases, according to a budget summary.

“The legislature’s version continues responsible budgeting practices and continues providing historic reserve levels — even while closing a budget gap approaching $30 billion,” the summary stated.

While the bill shares many similarities with Newsom’s proposal, there are some key differences between the two documents.

Newsom’s $306.5 billion version included $224.1 billion in general spending, $79.5 billion in special funds and $2.9 billion in bond funds, as well as $37.3 billion in budgetary reserves.

California Gov. Gavin Newsom speaks during a news conference in Paramount Calif., Monday, May 1, 2023. (Hans Gutknecht/The Orange County Register via AP, File)

One key variation in the legislature’s package is the restoration of significant reductions to transit capital funding, alongside increased support for transportation agencies, according to a report published by Legislative Analyst’s Office.

These agencies would be able to use the funding to purchase zero-emission buses and for operations, per the report.

The legislature’s version also includes a “slightly different mix of reductions” when it comes to climate change-related packages, the Legislative Analyst’s Office found.

Specifically, the bill seeks to restore funding for coastal resilience and water recycling while decreasing investments in energy reliability programs, according to the analysis.

The legislature’s proposal would also reallocate unspent funds in child care and state preschool programs to reduce family fees while boosting funding for schools and community colleges.

Applauding the bill’s passage, Assembly Budget Committee Chairman Phil Ting (D) said the budget “protects the progress” made on priorities like education, homeless programs, climate issues and child care.

“We’re also addressing transit’s fiscal cliff,” Ting tweeted.