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Democrats' spending list needs to be 'whittled down,' Gavin Newsom says

Sacramento Bee logoSacramento Bee 12/5/2018 Sophia Bollag and Alexei Koseff

California lawmakers had been in session for just 24 hours by midday Tuesday, and majority Democrats had already proposed tens of billions of dollars in new state spending.

As Gov.-elect Gavin Newsom made the rounds at the Capitol, he had a message for them: No.

"All of this will be whittled down and we all will live within our means," he told The Sacramento Bee as he left a meeting with Senate President Pro Tem Toni Atkins. "We're not going to deviate from being fiscally prudent."

In the first day of the legislative session Monday, lawmakers introduced more than 100 bills that contained more than $40 billion in proposed new spending. The proposals ranged from expanding Medi-Cal eligibility to adults living in the country illegally, which carries a roughly $3 billion annual price tag, to dramatically increasing funding for K-12 schools, which would cost $35 billion over an undetermined period of years.

Democrats claimed 60 of 80 seats in the Assembly and 29 of 40 in the Senate at the November election, and now enjoy the their largest margins in decades.

Some of their proposals align with goals Newsom touted in his campaign, from expanding access to health care to increasing funding for preschool.

Newsom, who will be sworn in next month, said he wants to make those changes gradually over his four-year term.

"Even if you wanted to provide universal preschool, you could not achieve that in the immediate term," he said, giving an example. "It would take years and years to build out that infrastructure."

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said the Democrats who run the Legislature frequently propose big spending increases, but Gov. Jerry Brown served as a check on their ambitions. As the record Democratic supermajorities take office without Brown's moderating presence, Coupal worries they will pass new taxes to pay for their plans that he said will hurt the middle class.

"Their appetite is insatiable," he said of Democratic lawmakers. "In the last years it's only because Gov. Brown had some sense of reality that stopped most of those."

The state's budget is flush with cash, according to projections by the Legislative Analyst's Office, which predicts a potential state surplus of $14.8 billion next year.

But Brown and other leaders have been warning for years of an impending recession that could drastically alter the state's finances.

Assemblyman Phil Ting, who chairs the Assembly's budget committee, said he wants the state's next spending plan to prioritize wildfire prevention, lowering pension debt and helping Californians in poverty, among other issues. But the San Francisco Democrat cautioned that even $3 billion in additional spending could cause a deficit during a recession.

"We're not going to be able to do everything," Ting said of his colleagues' proposals.

Ting said the current budget surplus could allow for some one-time spending and suggested tax increases could pay for some of the proposals that require ongoing funding.

Republicans, reduced to barely a quarter of the Legislature, don't necessarily see it that way.

"We need to be very cautious about committing the state to ongoing spending," said Assemblyman Jay Obernolte, the top Republican on the Assembly Budget Committee. "We still do not have enough set aside in reserves to weather even a mild recession."

Here are a few of the big ticket proposals unveiled this week:

* Assembly Bill 4 and Senate Bill 29 would expand Medi-Cal eligibility to adults without legal authorization to live in the United States. That's estimated to cost about $3 billion annually.

* Assembly Bill 39 by Assemblyman Al Muratsuchi, D-Rolling Hills Estates, would add $35 billion in education funding over an undetermined number of years to put California in the top 10 states for per-pupil education funding.

* Assembly Bill 123, by Assemblyman Kevin McCarty, D-Sacramento, would cost roughly $1.3 billion over three years to expand the state's preschool program.

* Assembly Bill 2 by Assemblyman Miguel Santiago, D-Los Angeles, would make the second year of community college free. The current budget appropriation to fund his bill last session to make the first year of community college free was $46 million.

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Assembly Bill 11, by Assemblyman David Chiu, D-San Francisco, would revive redevelopment agencies to finance affordable housing and infrastructure projects. Before they were eliminated in 2011 because of budget cuts and pervasive abuses, redevelopment agencies allowed cities and counties to take property taxes from blighted neighborhoods and use the money for projects to improve those areas. That arrangement cost the state about $5 billion annually to backfill local tax revenues, mainly for schools.

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Assembly Bill 10, also by Chiu, would increase California's tax credit for low-income housing development by $500 million.

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Assembly Bill 31, by Assemblywoman Cristina Garcia, D-Bell Gardens, would eliminate the state sales tax for menstrual products such as tampons, while Assembly 66, by Assemblywoman Lorena Gonzalez Fletcher, D-San Diego, would exempt infant diapers from the sales tax. Both measures were previously vetoed in 2016, when analysts estimated they would collectively cost the general fund about $45 million.

* And an assessment commissioned by the Legislature recommends spending more than $10 billion over three years to reduce child poverty. Some lawmakers have expressed support for some of the recommendations but haven't said whether they will push for the spending called for in the assessment.

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