California Democrats seek higher revenue, more spending

◼ AP via Vacaville Express - The budget compromise between Gov. Jerry Brown and the Legislature's Democratic leaders largely mirrors the governor's proposal for a fiscally restrained spending plan that assumes conservative revenue projections.

But there's a catch: Rank-and-file Democratic lawmakers say they are agreeing to less spending than they wanted so they could pass the budget on time, although they will push for funding pet projects next year. That's when they expect the state's tax revenue will be coming in higher than the Brown administration projects.

Such a scenario could clear the way for hundreds of millions of dollars in discretionary spending on a wide range of programs, from Medicaid reimbursements paid to doctors and hospitals to extra money for courts and community colleges. Just this week, the state controller's office said monthly cash receipts beat estimates by 12.4 percent, or nearly $800 million.

"If the revenues continue to perform as they have, the question becomes, 'What do they do with the surplus collections?' " Gabriel Petek, a senior director who tracks California finances for the ratings agency Standard & Poor's, said in an email Tuesday.

Petek said it appears the compromise budget plan pays down less debt than Brown had proposed. From a credit perspective, he said "that could be a bit of a fly in the ointment of an otherwise favorable process."