Details of the budget passed by Assembly, pending in Senate |

Details of the budget passed by Assembly, pending in Senate

The Associated Press

(AP) ” The state Senate on Friday struggled to compromise on a budget bill sent to it by the Assembly. Here are some details of the proposed spending plan, which could change in the Senate, and a separate tax-credit package passed by the Assembly:


– The Assembly budget contains about $103 billion in general fund spending, $1 billion less than Gov. Arnold Schwarzenegger proposed in May. The general fund pays the state’s ongoing operating expenses.

– It would reduce the state’s operating deficit from $1.5 billion to about $700 million and provide what lawmakers said would be the state’s largest-ever reserve in a single year, $3.4 billion.

– Total state spending, with payments for special funds and bonds, would be about $145 billion.


– The budget relies on some optimistic revenue assumptions, analysts say. It also takes $1.3 billion in unexpectedly high gasoline tax revenue to help pay for the state’s operating expenses. Democrats had sought to keep that money for use by public transit agencies.

– The budget also would rely on $4.3 billion left over from a tax windfall received in recent years.

– The proposal projects that the state will have a budget deficit next fiscal year of more than $5 billion.


– Welfare recipients would not receive cost-of-living increases, and increases for the elderly would be delayed five months. Children of welfare recipients, however, would not see reduced funding, as the governor had proposed.

– Public transit systems would lose $1.3 billion they could have received from highe-than-expected gas tax revenue.

– Medi-Cal caseloads would be fully funded, and the state will pay $214 million for managed care rate increases.

– K-12 education, as well as the University of California and California State University systems, would be fully funded.

– Local anti-gang programs would receive $9.5 million, and the California Highway Patrol would get $7 million to help address local gang problems.

– Juvenile justice programs would receive $14.9 million in planning grants, and reforms would place juvenile services closer to families.

– Transportation would be fully funded under Proposition 42.


Under a separate bill, the Assembly passed a tax-credit package that the Senate promised to reject. Among the details:

– The largest part of the package would alter a complex formula for how large businesses in the state pay taxes. It would allow companies that invest hundreds of millions of dollars in their in-state business to weight taxes more on sales, a change that could reduce their overall tax burden.

– Movie studios that relocate independent film operations or television shows to the state would be eligible for $100 million in tax breaks.

– Biotech, high-tech and other firms would get as much as $175 million annually in credits to boost investment in research and development.

– The tax package also includes a new sales tax exemption for the purchase of jet fuel in California and tax incentives for low-sulfur diesel fuel, designed to improve air quality around ports.