With only a few days left before the deadline, Gov. Jerry Brown and legislative leaders are negotiating a budget that would expand preschool opportunities for poor children and tap an environmental fund to help pay for the state's beleaguered bullet train project.
Only a few details have been discussed publicly as talks continue behind closed doors, and lawmakers were scheduled to meet into the night Wednesday to sort through competing proposals.
So far, however, the conversation has mirrored last year's, with Brown insisting on more conservative revenue projections but opening the door for lawmakers to spend more than he originally proposed.
"We're going to make some good, solid investments in kids, in infrastructure, and in some other key areas," Senate leader Darrell Steinberg (D-Sacramento) said earlier this week.
Steinberg originally wanted to provide every California child with preschool, at an annual cost of $1.5 billion. He later pared down his proposal to $378 million to pay for preschool for all 4-year-olds from low-income families.
Assembly Budget Chairwoman Nancy Skinner (D-Berkeley) said Tuesday "there will be good news" on preschool in the budget. Advocates say spending more money on early childhood education will help students succeed later in life, lowering costs for remedial programs and criminal justice.
Another point of contention in the budget has been how to spend revenue generated by the fees on polluters. Democratic lawmakers have eyed the money, which is required to be spent on reducing greenhouse gas emissions, for public transit and affordable housing.
Brown wants a large chunk, however, for the $68-billion bullet train. Capitol sources briefed on the negotiations, who requested anonymity to speak about the issue before a public announcement, said both sides were considering a compromise that would provide high-speed rail with some money to keep the project rolling.
Lawmakers are required to pass a budget by Sunday; if they miss the deadline, their pay is cut. Once a spending plan is approved by the Legislature, Brown will still be able to veto items he doesn't like.
Budget talks have been relatively smooth this year, especially since the Capitol is flush with cash from unexpected revenue.
In addition, Brown and lawmakers entered negotiations this year with one major issue, strengthening the state's rainy day fund, already resolved. The Legislature unanimously approved a constitutional amendment that would set aside money each year to pay off debt and stockpile in a reserve fund. The proposal will be placed before voters in November.
Even though Brown is running for reelection, he's not facing much political pressure — he is widely expected to beat his Republican opponent, former U.S. Treasury official Neel Kashkari. The governor has enjoyed wide support on financial issues, and 73% of likely voters said they supported his budget proposal, according to a May poll from the Public Policy Institute of California.
A sticking point in budget talks has been Brown's effort to avoid paying overtime to home-care workers, which is required by new federal regulations. Advocates say the governor's proposal would harm low-income elderly and disabled residents who rely on the state for assistance.
"It's not something that's palatable," Skinner said.