$123 BILLION BUDGET PASSES LEGISLATURE

A state budget that adds money to both social programs and adds $2 billion more than required to the state’s “Rainy Day Fund” was passed by both houses of the Legislature in time to meet the constitutional deadline of June 15. The adopted budget includes more funding for child care programs, affordable housing and in-state enrollment for both the UC and CSU. The budget also provides for a $10 per year increase in vehicle registration fees and is expected to generate about $400 million annually for several different state agencies.

The state’s budget outlook will be affected by the outcome on a number of November ballot measures, including the extension of Proposition 30 temporary tax rates on high-income Californians, a proposed increase in the tobacco tax, and a $9 billion school bond measure, so we will be watching those measures closely.

Business leaders, including Rex Hime, President and CEO of CBPA, have generally praised the budget plan for its relative restraint in creating ongoing spending obligations for the state.

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