UPDATED: Gov. Jerry Brown has officially announced a rainy day fund agreement Thursday.
In a statement from his office, Brown said the deal replaces the Rainy DAy Fund on the November ballot with a dedicated reserve that would allow the state to save for the future.
Read Brown's announcement here.
Senator minority leader Bob Huff says the Republicans are pleased with the compromise.
“I think it reflects our concerns we had about it not being gamed too easily, about it not becoming a slushy fund for the majority party," expains Huff. "And so you see some objective criteria about how the money goes in and objective criteria about how it comes out.”
The state will also be required to make accelerated debt payments, something Senate President Darrell Steinberg pushed for.
“It’s a complicated area and formula," says Steinberg. "But we staked out what we believe to be an important point and a large point about how this should be done and in the end it came together."
9:30 A.M. Several California legislative sources tell Capital Public Radio a deal is near on a "rainy day fund" constitutional amendment.
The proposal would replace a separate state budget reserve constitutional amendment currently set for the November ballot.
Outgoing Assembly Speaker John Pérez first proposed a rainy day fund a year ago. Gov. Jerry Brown called a special session last month to negotiate a deal. For the first time in several years, Republican legislative leaders are participating in talks because Democrats have lost their two-thirds supermajority in the Senate.
If the current deal holds, the legislative sources say, money would be deposited into the rainy day fund in two ways:
- an automatic deposit of 1.5 percent of all general fund revenues, and
- any capital gains revenues that spike above 8 percent
Deposits to the rainy day fund could be suspended and money could be withdrawn only in years that general fund revenues come in below general fund expenditures from any of the previous three years' budgets. This would be done through the existing budget process, with a vote from majority of the legislature and the governor's signature.
Also under the deal, 50 percent of the money deposited into the rainy day fund for the first 15 years would automatically be put toward paying down debt. A new report from the non-partisan Legislative Analyst's Office says California is $340 billion in debt - of which $200 billion is currently unfunded.
The legislative sources would not speak on record because the deal is not yet final.
“We’ve been in discussions with the Legislature, and we’re hopeful that we’ll be able to reach an agreement to move a measure forward that reflects the key principles of the Governor’s proposal to strengthen the state’s Rainy Day Fund,” says H.D. Palmer with the governor's Department of Finance.