Still Waiting On A CA Budget Deal

SACRAMENTO, CA — Legislators, advocates, policy nerds and reporters (including my CalMatters colleague Sameea Kamal) waited all weekend, but the big announcement of a budget deal between Gov. Gavin Newsom and legislative leaders never came.

Instead, with time running short, bills were put in print that reflect some of the negotiations, even without an overall agreement. Leaders in the Assembly and Senate had their own priorities, which they combined into a budget the Legislature passed on June 15. (A reminder of where we are in the sometimes convoluted budget timeline, leading up to the start of the new fiscal year on July 1.)

These measures, which will be voted on this week in addition to the main budget agreement, include several significant pacts:

• In Hollywood, studios executives and labor unions collaborated to ensure that a possible five-year extension on tax credits for film and television studios would include a new provision that would refund studios in cash if their tax credit is bigger than their tax bills, reports the Los Angeles Times. The long sought-after tax credit will benefit both big and small studios as well as production staff, as it requires studios receiving the credit to abide by new set safety rules. They must also meet certain diversity targets to receive a portion of their tax credits.

• In health care, hospitals, labor groups and insurance providers have thrown their support behind a measure that would boost reimbursements for certain Medi-Cal providers — particularly providers in primary care, maternity care and non-specialty mental health care — by using funds from a bigger tax on health insurance plans. According to Politico, the proposal would net about $35 billion for the state by 2026 (this includes additional federal funding), and much of it will go toward the state’s public health care system. The money would be the largest investment in Medi-Cal ever.

It appears that the hold-up to the overall deal remains Newsom’s demand that it include his proposal to overhaul the permitting process for major infrastructure projects — including the highly controversial Delta tunnel project — by changing the California Environmental Quality Act. The governor wants to streamline the permitting process among federal, state and local governments; limit the time courts have to hear challenges on environmental reviews; and increase funding to state agencies.

But several lawmakers, specifically those with constituents who live around the Delta, have urged delaying the plan while they work out disagreements over the proposed $16 billion tunnel project that would send water from the Sacramento-San Joaquin Delta south to 27 million people and 750,000 acres of farmland. They argue that Newsom’s bill package would result in unchecked development of the tunnel — and disrupt residents’ way of life and threaten the environment.