Democrats in the California Legislature never shy away from hyping their state budgets as both responsible and visionary. But the rhetoric surrounding this year’s proposal, signed into law on Tuesday, has sounded more like a call to arms.
It is the latest sign that the era of President Trump has done more than change the mood of the majority party’s lawmakers in Sacramento — it’s changed their approach to governing the nation’s most populous state.
“This is a budget that does things for people, not to people,” said Assembly Speaker Anthony Rendon (D-Paramount) as lawmakers debated the plan on June 15.
“It’s surprising that more folks don’t want to emulate what we’re doing,” said Assembly Budget Chairman Phil Ting (D-San Francisco). “There’s no question that California’s actions are in direct contrast to D.C.”
The budget’s most visible rebuke of Trump is its use of $45 million in state taxpayer dollars to provide legal services for immigrants. The appropriation is triple what those efforts normally receive and is scheduled to last at least through the early summer of 2020. A portion of the money — $545,000 — was earmarked to help boost the legal services to people facing deportation.
“We’re a state that welcomes immigrants and doesn’t demonize them,” Ting said.
Republicans in the state Capitol were unsurprisingly critical over such items being included in a budget over which they had little say.
“Negotiated behind closed doors, this budget shows the Democrats’ priorities, and clearly, the taxpayers of California are not high on that list,” said state Sen. Jim Nielsen (R-Gerber).
There’s no question that California’s actions are in direct contrast to DC.
While those dollars are small in comparison to the overall size of what it takes to run California’s government, they were funds that in other years could have gone to different services.
“That amount of money matters,” said Chris Hoene, executive director of the California Budget and Policy Center, which advocates for programs aimed at low-income families. “It’s a choice that comes with trade-offs.”
Lawmakers also set aside a portion of revenues generated by last fall’s tobacco tax increase for family-planning services — help, but not total relief, in the event that Trump and congressional Republicans make good on promises to scrap federal funding for Planned Parenthood.
Elsewhere, the Legislature’s liberal Democratic leaders used the budget to play defense by offering help for those they believe are vulnerable to Trump’s proposed cuts in federal programs. It includes new money for subsidized child care and preschool, and it expands California’s earned income tax credit for the working poor.
Legislators believe the federal version of the earned income tax credit may not be safe once Congress has to pay for the president’s plans for new tax cuts.
“It seems to be the only tax credit that Washington doesn’t like,” Ting said.
Other cuts could also be coming. The White House has proposed new, strict eligibility rules for food stamps (and a new rule for matching state government dollars) and as much as a $10-million reduction in federal affordable housing help for California.
What lawmakers couldn’t do in crafting a new state budget, however, was to free up enough money to fill the gigantic hole that would be created by a retrenchment of Medicaid, the federal subsidy that helps provide free healthcare based on a person’s or family’s income. The state’s Medi-Cal program relies heavily on Medicaid dollars, even more so since the expansion of federal funding under the Affordable Care Act.
Although Congress remains divided on what a “repeal and replace” plan for the 2010 law will look like, both the House and Senate versions would leave California recipients and elected officials in a quandary.
“You would end up with a choice of who you cover and how you cover them,” Hoene said.
On Wednesday, California officials estimated the latest GOP proposal, promoted by Trump but still in limbo with some senators, would cut $115 billion from federal healthcare dollars sent to the state in just the first seven years. The first-year reduction alone is estimated at $3 billion — more than one-third of the money in the state’s rainy-day reserve fund.
Legislators in Sacramento were asked time and again over the winter and spring whether they would craft even a partial backup plan, but they insisted it would be premature to act without more information. The budget signed by Gov. Jerry Brown that runs through June 30 of next year is balanced on the presumption of $68.9 billion in federal healthcare funds.
In some ways, say legislative staffers and advocates, the biggest impact of Trump’s nascent presidency and its proposals for less federal spending may be that it has served as a wake-up call to the financial challenges that lie ahead. For more than two years, Brown has urged legislators not to commit to new long-term spending. His warnings have been that an economic slowdown — or even a mild recession — is almost certainly somewhere on the horizon.
The president, some believe, has given lawmakers a more visceral way to view the threats to California’s balanced budget. As such, frequent demands in the past by legislators for more spending were noticeably absent in the state Capitol this year.
“The governor has kept warning about a downturn,” said Hoene. “The federal unease suddenly gives that a bit more reality.”