Assembly Democrats seek $1B in state spending despite risks

Markets Associated Press

California Assembly Democrats are pushing for $1 billion in new state spending even as some warn that the policies of President-elect Donald Trump and Republicans in Congress could have devastating consequences for the state budget.

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Assemblyman Phil Ting of San Francisco unveiled the push for more spending Tuesday at the start of an anticipated six-month budget battle amid lower-than-expected state revenue and fears that another recession is inevitable.

Ting, chairman of the Assembly Budget Committee, said the proposed new spending should go to things such as expanding the earned-income tax credit, mandatory full-day kindergarten and reducing college costs. He said Democrats are also considering ways to raise additional revenue for housing but declined to elaborate.

He noted, however, that Republicans in Washington could cost the state as much as $20 billion in revenue if they repeal the Affordable Care Act. Ting said that money would be impossible to replace.

Still, Ting said it would be "irresponsible and frankly reckless" for lawmakers to hoard cash waiting for unknown changes from Washington. The state can still maintain robust savings even if it increases spending, he said.

"I don't change my commute over the Golden Gate Bridge, over the Bay Bridge, in anticipation of the next earthquake," he said.

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His position is likely to trigger a confrontation with Democratic Gov. Jerry Brown, whose cautious budgeting is perennially at odds with Democratic legislative leaders eager to expand education and safety net spending.

"We have seen painfully in the past what happens when the state overcommits to revenues that did not materialize," said H.D. Palmer, spokesman for Brown's Department of Finance.

Revenue since the start of the fiscal year is about $1.3 billion ahead of the same period a year ago, but it's about $600 million less than expected when the administration released its last revenue forecast in May.

The lower revenue combined with uncertainty on federal policies and the possibility of a recession are among Brown's considerations as he finalizes his own budget proposal due by Jan. 10, Palmer said.

Assembly Democrats are buoyed by a relatively optimistic outlook released from the nonpartisan legislative analyst, Mac Taylor, who forecast a $2.8 billion budget surplus next year. He also said California should be able to weather a mild recession without major budget cuts or tax increases over the next four years.

Legislative leaders on Monday proposed spending up to $80 million to provide legal assistance for immigrants facing deportation if Trump carries out his campaign pledge to more strictly enforce immigration laws.