California Lawmakers Met Their Budget Deadline. Here’s What’s Left To Negotiate In The $300 Billion Spending Plan.

California budget: Big surplus, big differences - CalMatters

Source: Cap Radio, by Nicole Nixon

California state lawmakers approved a $300 billion budget this week, but several key sticking points remain between Governor Gavin Newsom and lawmakers, which could drag out negotiations on a final spending plan.

Under California law, the Legislature must approve a budget by June 15 or forfeit their pay and per diem until they do. The governor must sign the spending plan by June 30, in time for the state’s new fiscal year to begin on July 1.

Often, many budget details are worked out and approved in the weeks following those constitutional deadlines, which are referred to as “budget trailer bills.”

That appears to be the case once again this year, as top lawmakers and Newsom continue to negotiate over exactly how to spend a historic $98 billion surplus.

The budget approved by the Legislature Monday includes a record amount of money for public schools and higher education, as well as a total of $37.8 billion for budgetary reserves — nearly double the amount in savings before the pandemic in 2019.

It also includes $40 billion for infrastructure projects and funding to make Medi-Cal available for every low-income undocumented resident.

Despite the budget’s monstrous size, there are still many details for lawmakers and the governor to work out.

Republican Assembly member Vince Fong (R—Bakersfield) said the approved budget “fails to adequately address critical and core crises facing our state from the devastating drought to catastrophic wildfires, to a potentially crippling power shortage.”

Fong, who is the top Republican on the Assembly Budget Committee, criticized Democrats for passing an incomplete spending plan to meet their deadline and planning to fill in the gaps later. The practice has become the norm in state budget-making over the past decade, though Republicans say it lacks transparency.

Other unresolved issues include rebates to address skyrocketing gas prices and inflation, as well as reimbursement rate increases for state-sponsored child care providers and disability insurance, which received a temporary boost during the pandemic. Lawmakers want to increase those rates, but the Newsom administration is reportedly hesitant.

“It’s not a big surprise that when there’s a lot of money on the table, there might be more points of contention,” said Chris Hoene, executive director of the California Budget and Policy Center. “There’s often more contention about how to spend money during the good times because you’re expanding programs or you’re creating new programs or you’re doing one-time things.”

Another sticking point between top lawmakers and Newsom is the size and eligibility for a tax relief package aimed at helping Californians cope with inflation and record-high gas prices.

In March, Newsom proposed sending $400 per vehicle — up to $800 — to car owners to offset the rising cost of fuel. Leaders in the Assembly and state Senate have insisted on targeting tax relief to lower-income residents, who spend a higher percentage of their income on necessities like housing and transportation and are hit harder by inflation. Senate pro Tem Toni Atkins (D-San Diego) and Speaker Anthony Rendon (D-Lakewood) unveiled their own plan to send $200 per person, with an additional $200 per dependent, for individuals earning up to $125,000 or families with incomes up to $250,000.

But three months later, neither side appears to have budged. In a statement after the Legislature’s budget was passed, Newsom’s office said the governor “would like to see more immediate, direct relief to help millions more families with rising gas, groceries and rent prices” and noting Newsom’s plan would spend $3.5 billion more on tax relief.

Meanwhile, Republicans continue to call on Newsom and Democrats who control the legislature to suspend the state’s gas tax, which is set to increase from 51 cents per gallon to 54 on July 1.

“At a time when we have the highest gas prices not only in the nation, but in U.S. history, we need real solutions that will ease the burden on families, not increase the load,” Assembly member Suzette Valladares (R-Santa Clarita) said at a press conference Wednesday. “My colleagues and I are here … to remind Governor Newsom that it has been nearly 100 days since he promised he would bring Californians relief from the highest gas prices in the nation.”

Valladares told stories of constituents who had to sleep in their cars or skip university classes because they couldn’t afford fuel.

Republican state lawmakers argue suspending the gas tax would provide near-immediate relief to those most impacted by high gas prices.

Democrats have refused to cut the gas tax, citing the funding it provides for infrastructure projects. They also say there’s no way to guarantee oil companies and gas stations would not keep prices high and pocket the difference. A bipartisan bill attempts to address that issue by requiring fuel stations to pass on their savings and by backfilling lost revenue from the state’s burgeoning general fund.

Hoene said as an organization focused on improving life for the state’s lower- and middle-class residents, the California Budget Center prefers the Legislature’s approach of targeting relief based on income. He also thinks the state should deliver the fund through the Franchise Tax Board, which doled out millions of Golden State Stimulus checks last year.

“The best way to get aid into the hands of people who need it most is to base it on their income level,” Hoene said, “and deliver them a check — electronically or in other forms — which is exactly what we did two times over the past year, very successfully in the state.”

Local SSA officials not sure how to process file-and-suspend requests

Mary Beth Franklin reports that some savers, hoping to beat a deadline to file and suspend Social Security benefits, are running into misinformed Social Security Administration officials. She advises people to bypass local offices and file online. InvestmentNews (2/17)

Calif. considers extending insurance enrollment deadline

Covered California will allow anyone who begins applying for health insurance by Sunday night to finish the application by Feb. 20. Exchange officials say they are also considering contingency enrollment plans for people who learn during tax filing that they owe a penalty for not having health insurance. KQED.org/State of Health blog (2/12)

Small Businesses Must Gather Data Now for Obamacare 2016 Deadline

Companies with 50 to 99 employees will fall under the federal healthcare mandate starting January 2016, but they should prepare now. Small companies should begin tracking data to help them determine compliance and which employees are entitled to an offer of coverage in 2016. “Unfortunately, no magic bullet exists in the form of affordable software that gathers data in one tidy place; nor is the government ready with a form. The required reporting is detailed. Leaving the record keeping to the 11th hour will be too cumbersome for smaller companies…Planning facilitates developing the best ACA strategy,” says Finny Varghese, an expert on the ACA

Here’s what companies need to do according to Lexus/Nexus:

• Classify workers. Coverage is required for full-time employees, those working 30 or more hours weekly, and full time equivalents. FTEs are calculated as the number of part-time workers multiplied by the number of hours worked per month divided by 120. Companies may discover their total full-time count falls below the range.

• Define standard measurement periods for determining employee classifications. There will be one look-back period for ongoing employees and measurement periods for each new hire. Tracking this year provides a beta test for 2016 data and could guide classifications.

• Detail each employee who gets coverage under current healthcare policy. This information includes the duration of any waiting period, months of eligibility and coverage, premium for the lowest cost option for employee-only coverage, and whether coverage meets the government standard.

ACA immigrant documentation deadline poses problems

Technical issues and language barriers are impeding efforts to obtain documentation from some 300,000 immigrants who have been asked to provide paperwork demonstrating their eligibility for health insurance under the Affordable Care Act. The Washington Post (tiered subscription model)/The Associated Press (9/2)

Many to Transition In and Out of Covered California

Recent media reports about have focused on the crush of people trying to sign up for Covered California, but analysts at UC Berkeley say not to overlook the many people who will join or leave the program after that deadline. “For many people, Covered California is a place where they will access coverage for a short time during a life transition, such as job-loss or divorce. People will enter and leave coverage on a regular basis,” said Ken Jacobs, who co-authored the report. Forty-three percent to 47% of those who are enrolled in a Covered California plan and are receiving federal tax subsidies to finance their coverage will leave that plan within 12 months. Twenty-one percent of those will move to Medi-Cal due to changing income and 19% will move to job-based coverage.

Sixteen percent of non-elderly people who signed up for Medi-Cal are expected to become eligible for plans offered through Covered California within 12 months, due to their crossing over the Medi-Cal income eligibility threshold. An additional 9.1% of this group will move into job-based coverage.

Some will enter the Covered California marketplace outside the open enrollment period when they experience a life transition that triggers a special enrollment period. These transitions include losing job-based coverage, gaining or becoming a dependent through marriage, having a new child through birth or adoption, becoming a citizen or lawfully present immigrant, and moving into a new service area.

Making sure that people transition successfully will depend partly on how much Medi-Cal and Covered California get the word out to eligible populations through the unemployment office, the DMV, and the food stamp program. “For health insurance reform to be successful in reducing the numbers of uninsured, Medi-Cal and Covered California will need to be prepared for not just long-term enrollees, but also for enrollees who…are enrolled for less than a year,” the authors conclude. For more information, visit https://newscenter.berkeley.edu.

Last Updated 06/29/2022

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