This is Midday Edition I am Maureen Cavanaugh, they could not decide between them, that will become the signature phrase for the 39 district sate Senate -- state Senate race. Tied last night when it comes to endorsing Marty block, or state speaker Toni Atkins. KPBS reporter was there. Apparently there was not much the two disagreed about, they were both asked how to increase affordable housing, what the state can do, or intervene over the transportation plan, they did not disagree too much, was there any thing on the issues? I was listening but I did not hear much at one point Senator. block challenged Senator. Atkins on the clean energy act, he referred to the full version, these mandate productions for cars -- reductions for cars. That did not pass the assembly. That did not mean that they did not lock horns as -- at all? On Atkins tenure, that question led into the block challenge are not getting the furlough -- full version. Here is one thing he said. She is the leader of the assembly, that is an important position I respect her greatly for that, if you take credit for the assembly and what they've done, you have to take lame for the severe failures last year. Atkins responded she works with the votes that she has in the assembly she has to compromise to get things done, her response reference clean energy act which is called Senator. Bill 350. I will take successes and failures, we have the most aggressive piece of legislation passed when we passed 350. We will continue to work to get it done. The big question hanging over all of us Claire, why is Toni Atkins challenging a fellow Democrat in a relatively safe Senate seat next That came up directly, the moderators asked both, why are you running for this seat? When no one is running for the mayor of San Diego? They both had a joke moment, they fully support each other for their candidacy for mayor. They believe the strengths lie in governing at the state legislature level, she doesn't believe she should be in city government. Block says he wants more time to get more things done in the Senate. Atkin says she is running for voters to give choice. She considers an easier target -- block an easier target. They were said to give someone an endorsement either candidate needed 60% of the endorsement, it was a tie, 23, 223, -- to 23. They said they were relieved that they did not have to make an endorsement they love them both. I am speaking with Claire thank you so much. This is KPBS Midday Edition, I am Maureen Cavanaugh, Governor. Jerri Brown increased as he revealed the 2016 budget -- Jerry Brown -- here is Governor. Brown at this morning's press conference. I can see very clearly, this budget relative to the budget over the last decade and a half, it is in good shape. Joining us to tell what the governor means is then Adler. Thank you for joining us, how much was the budget unveiled by the governor today? We are looking in the $170 billion range in the general fund, and more on top of that with special funds, he is proposing a budget that is large, it is projecting 6 1/2 surplice, the governor is also proposing to put money into the rainy day fund, that voters approved in 2013, he is proposing more of that, prompt to would put in a half-million dollars, the governor would like to put in on top of that, that would raise the state budget if the governor's [Indiscernible] is accepted. The governor is putting more money into the education, proposition 98. You will see pupils spending -- you will see people spending, per pupil, when the state was coming out of the recession. You have that proposal, and you have seen the governor for previous cost to the budget, children living in California illegally. That is an additional cost approved in last year's budget, being picked up in this year's budget the minimum wage. First under a bill that the Governor. signed into law in a couple of years ago 2013, an additional cost to the state when minimum wage goes up. The budget assumes and accounts for those costs. By and large this seems like a status quote budget, but there are new thing in there, by large there are increases in programs that have rising costs. Caseloads are going up, providing healthcare to the poor goes up. Proposition 98, you boost education spending as well. The budget addresses 1 billion The budget addresses $1 billion problem the state has can you explain that to us? Not very well, it is a confusing topic, I will give it a try prickle there is currently a tax on managed care organizations, to provide Medi-Cal patients, that money is used to draw down matching funds in the end, the health insurers that are getting taxed, they do not mind this tax, their whole comes into the state. It is viewed as a good thing the government has said the tax and way it is structured only some pay and the others don't. That is no good anymore. They will cut off that stream of federal funding at the end of this fiscal year unless it is restructured, that led Governor. Brown to a meeting, the governor and now announced he has support of the large health plans that can address this issue and draw down that additional funding. If so it would need two thirds vote of the Legislature, as well as every Democrat. The money in theory would put towards disabilities and reimbursement rates and Medi-Cal rates reimbursement rates for health care to not like to provide care to Medi-Cal patients, they are paid less for those patients then other patients in the private sector. They would like an increase in reimbursement rates. That would be in theory, a part of this deal. If the deal comes to be. Great job explaining that. [Laughter] One thing on the sessions that were called last year, another one [Laughter], transportation infrastructure, that is included in the governor's budget. He wants to see more money going towards roads, and he wants to see the decreasing gas tax revenue that we have been seeing fixed in some way. -- Is there something that addresses that? There is, something put forward late August or early September, the proposal did not go anywhere, it involved a tax increase, gasoline tax increase, increase in the vehicle fees that drivers pay each year. That is not new. What he is proposing today, it remains to be seen in the election year, you need two thirds of the vote to get this proposal through. Unless there is a different proposal that finds a way to move pots of money in a way that doesn't require the majority of the money. You will need support from the Democrats. Generally speaking a vote to raise the tax can be a political loser, it is an open question whether in this election year the political year -- the will to get this done. Possibility of another recession in California, I think that is because he wants to explain his conservative revenue estimates, and conservative spending measures to people in actual fact, the volatility really does hit the California buzz it -- budget hard. Can you tell us about that? The governor pointed to charts, one is to show capital gain, the stock market revenues, the budget is predicted upon them. That is why the rainy day fund approved in November 2014, basically draws a certain amount of the gains capital, and used to pay down debt. That is why it was set up that way, it went capital gains revenue spike, we were to take a large amount of that spike in capital gains and set it aside for a rainy day, the governor made a point today, repeatedly talking about why he believes new and ongoing commitments would be a bad idea. If a recession what -- were to hit, recessions always happen eventually. We have been in a prolonged period of an upswing, the rainy day fund if it hits will be empty out very quickly. You will see a state lost revenues, 55 $55 billion in state revenues dropped, and the conservative budget he is putting together today, there will be a large deficit if there is permanent ongoing spending. Each time he was asked today by reporters about this program, or this proposal, whatever it might be. He said something along the lines of this. There is not a candy store where you can pick out anything you want, you have to choose, that is what we will do. [Laughter] okay it is not a candy store. Today Governor. Brown announced his budget, what happens next in the process? The governor proposes that the legislature disposes come they will put forth their own proposal this year, the two changers will reconcile on the plan and the reconcile a nation will begin. -- And the reconcile will begin. The big picture negotiations will not start until mid-May, early June, the governor will put out a revised budget proposal, we will have a better idea on what the state will actually have, instead of what we will have in the bank on April, we will decide on spending levels on new existing programs on the budget. Thank you been -- thank you Ben.
Gov. Jerry Brown proposed a $122.6 billion budget plan for California on Thursday that includes billions more in spending for education, health care and state infrastructure, increases the state rainy day fund to $8 billion and takes steps to pay down debts.
"Relative to budgets of the past, this budget is in good shape," Brown said of his 2016-17 spending plan. "We also ought to look at what's the capacity of the state, and what's the taxpayer willingness to spend more."
The budget also includes a $1.1 billion compromise on a new tax on health insurers to replace one that will expire in June. Brown said the tax is critical to maintaining the state health care program for the poor, which is projected to cover 13.5 million people by 2017, nearly a third of the state's population.
The budget would keep tuition flat for another year at University of California and California State University schools, while a voter-approved minimum funding guarantee will send funding for public schools and community colleges soaring along with state tax revenues.
Per-pupil spending would increase to $10,591 under Brown's plan, a $368 per-pupil increase over 2015-16. Brown also wants to direct money from other sources to compensate public schools for earlier lean years, which would increase spending to $14,500 per student in 2016-17.
The substantial investments proposed by Brown's administration underscore the state's soaring economic recovery. The state faced a $26 billion budget deficit when Brown took office in 2011, forcing deep cuts to social welfare programs, schools and universities.
The state's economy is highly reliant on volatile capital gains revenues from the wealthy, which are soaring along with the state's economy, and Brown warned again Thursday of the inevitable boom-and-bust cycle, proposing to end the fiscal year with an $8 billion rainy day fund.
Republicans cautioned against expanding social welfare programs that will require long-term funding. Assembly Minority Leader Chad Mayes, R-Yucca Valley, said the state must not spend money "as if it will reappear every year."
"Democrats should pay attention to the legislative analyst and Governor Brown's warnings about overspending, and balance the need to invest in critical infrastructure projects to improve our roads, schools and dams with one-time money," Mayes said in a statement.
Special funds and bond money will push overall state spending to $170.7 billion, but the Legislature and governor only are responsible for allocating money from the general fund. Brown's announcement sets the stage for a months-long debate with lawmakers over spending priorities.
Despite the large spending increases, Brown acknowledged there is not money for everything on lawmakers' wish lists.
"It's not a candy store where you can pick out whatever you want," he said.
Advocates also have been pushing the state to raise reimbursement for doctors who provide care in the Medi-Cal program, which was cut by 10 percent during the recession. Brown did not propose an increase Thursday.
Senate President Pro Tem Kevin de Leon, D-Los Angeles, said the state afford to can maintain its fiscal stability while helping the most vulnerable Californians.
"We still have to take a closer look at strengthening our health care system for the poor and developmentally disabled that has been starved for far too long," he said in a statement.
Brown called special sessions last year to address the health care tax and a $59 billion backlog in transportation infrastructure spending, but neither gained traction. He said Thursday that he'll get more involved in talks with lawmakers on both issues this year.
He said his administration has been deep in talks with health insurers to come up with a fair proposal to plug the $1.1 billion health care hole. The plan still needs Republican votes.
"We'll get whatever people think is right. It takes a few Republicans to join in with the Democrats," he said.
The budget plan also reflects Brown's transportation proposal to spend $3.6 billion a year on infrastructure improvements, funded through a combination of vehicle registration fees, increases to the diesel and gas taxes, and diverting money from the fees charged to polluters.
Republicans have rejected tax increases, arguing that the state should instead return diverted transportation money and make major cuts to Caltrans.
