legislature

SACRAMENTO — Gov. Gavin Newsom reached an agreement Friday with legislative leaders on a $351.7-billion state budget in his final year as governor, a spending plan that uses a tax windfall to avoid major cuts and lessen California’s chronic deficit in the years ahead.

The deal provides nearly $2 billion in state revenue next year through tax hikes on corporations, new levies on software sales and a revamped tax on managed healthcare organizations. Lawmakers and the governor continue major investments in education, healthcare and agreed to increase spending on subsidized childcare and affordable housing.

“We want to leave the next governor not only a balanced budget, but a budget that is substantially structurally sound, and we’re going to accomplish that,” Newsom said in an interview Friday. “We were very cautious in terms of new spending,”

The agreement ends weeks of lobbying by outside interests and negotiations among lawmakers and the governor at the state Capitol about how to handle a surge of income tax collected on stock market gains related to artificial intelligence.

Early forecasts last June projected a $12.6-billion deficit in 2026-27, according to the California Department of Finance. Updated predictions now suggest the state will end the year with a surplus of $4.5 billion.

Democrats, following Newsom’s lead, are tucking away $6.4 billion for future years, which allows the governor to knock down a deficit previously projected through 2027-28 and assuage criticism about his spending habits.

But economists say the fix and revenue increase is likely only temporary.

Spending in California has generally exceeded revenue growth during Newsom’s tenure in the governor’s office, creating a chronic shortfall. Despite the extra funding, the budget continues a trend of relying on reserves, shifting funds, borrowing and suspending debt payments to balance state spending.

The Legislative Analyst’s Office, the nonpartisan fiscal advisor for lawmakers, has warned of a roughly $10-billion gap between the amount of money the state brings in and spends, which could grow dramatically worse if the stock market turns downward. The LAO has said the existence of any operating deficit during a revenue boom is a red flag and that the state is “ill-prepared” for even a modest decline.

Christopher Thornberg, an economist and founder of the consulting firm Beacon Economics, said it’s business as usual in Sacramento.

“They love increasing spending. But it seems politically impossible to go the other way,” Thornberg said. “We’ve seen this play out over and over again.”

Lawmakers and the governor offered a different take and asserted that their decision to put the $6.4 billion into a short-term reserve, called the Projected Surplus Temporary Holding Account, and ask voters to allow them to store more money in the rainy day fund are examples of prudent budgeting.

“You see us save more and you see try to address the immediate needs of our community, but also the structural budget that potentially awaits us,” said Senate President Pro Tem Monique Limón (D-Goleta) in an interview. “We are forecasting a moment where we will need to address these issues and we want to start now to think about the future as well.”

Under a progressive tax structure, the state budget is dependent on income taxes paid by the ultra-rich on earnings largely from capital gains. The set up leaves California vulnerable to the unpredictable nature of the stock market, dramatic swings in revenue and, in recent years, reliant on poor projections.

Negotiations at the state Capitol included an agreement on a constitutional amendment that seeks to offset the revenue highs and lows.

If approved by voters on the statewide ballot in November, the amendment would raise a cap on mandatory deposits into the rainy day fund from 10% to 20% of general fund revenue. The measure would also allow lawmakers to exempt money they put into the rainy day fund and the temporary holding account from state spending limits.

Under an existing state appropriations restraint, also known as the Gann Limit, lawmakers cannot spend more than an amount determined by a formula that takes annual tax proceeds, changes to the population and cost of living into consideration. Tax revenue above the limit must be divided between schools and refunds to taxpayers.

With few exceptions, the limit applies to most appropriations of tax revenue, including when lawmakers put money away in the rainy day fund and other reserves.

Newsom said the change will leave the state in a much better position to weather the volatility. Though calls for tax reform remain in California, the governor said being able to place more money into the reserves could ultimately solve the state’s budget challenges.

“The one thing missing is the one thing that I think we finally landed, which is the change in the reserves,” Newsom said. “It changes the political dynamic, where now you’re not exchanging general fund priorities.”

Republicans criticized the proposed constitutional amendment, which passed in a budget trailer bill this week, for failing to require that excess revenue pays down the state’s $22 billion in unemployment insurance debt.

State Sen. Tony Strickland (R-Huntington Beach) called it a missed opportunity.

“It does not require debt payment to go to the UI debt,” Strickland said. “It facilitates more spending, exempting reserve deposits from the state spending limit.”

As part of the negotiations, lawmakers agreed to delay some healthcare cuts that would have required monthly premiums for immigrants and eliminated dental care. The deal adopts a Medi-Cal asset test of $21,000 on July 1, 2027, instead of a $2,000.

The budget agreement includes a provision requiring California’s next governor to develop options to reduce taxpayer subsidies for corporations whose employees receive state-sponsored healthcare through Medi-Cal instead of the company’s health plan. The plan is aimed at raising revenue to offset federal cuts that are expected to leave millions of Californians without access to healthcare.

The California Department of Finance said state reserves are expected to total $28.8 billion under the 2026-27 budget.

New law grants president power to use military to clear roadblocks set up amid weeks of anti-government demonstrations.

Bolivia’s legislature has passed a law granting President Rodrigo Paz the authority to use the military to clear roadblocks set up by antigovernment protesters.

The legislation passed in Bolivia’s Chamber of Deputies on Sunday following an overnight debate. It had previously been approved by the Senate and was expected to be signed into law by Paz.

“This law is hereby passed,” announced Roberto Castro, President of the Chamber of Deputies.

The military has so far only been used in support roles for anti-riot police during weeks of demonstrations calling for Paz, the centre-right leader backed by the US, to step down.

About 100 roadblocks have been set up across the country in recent weeks. Authorities have said the road blockades have led to food and medicine shortages.

On Saturday, dozens of riot police backed by military vehicles fired tear gas as they attempted to clear a road in the town of San Julian.

Protesters threw stones and burned tyres to try to halt the police advance, said an AFP reporter at the scene.

The new law would allow soldiers to use force against protesters, and also grants them a “presumption of legality” in conflict situations. That means their actions will be deemed lawful unless proven otherwise.

It comes after Bolivia’s legislature voted last month to repeal a 2020 law that restricts the use of the military to crack down on protests.

Farmers, miners and transportation unions have been among those leading the protests. The demonstrations come amid widespread unrest over rising inflation, low wages and Paz’s move to abolish fuel subsidies.

Paz, who was elected last year, has charted a course as a pro-business leader, vowing to guide the country through an ongoing economic crisis.

He has received the backing of the US, with the administration of the US President Donald Trump’s so-called “Shield of the Americas” regional coalition vowing support during protests..

“We stand with Paz’s democratic government as it fights back against attempts to drag Bolivia backwards through cynical efforts to prevent the delivery of food, medicine and other vital supplies to the Bolivian people through fake road blockades,” said the alliance members, who have vowed to take a militaristic response to crime in Latin America

NEW ORLEANS — A sharply divided Louisiana Supreme Court on Monday signed off on abolishing an elected office won by a New Orleans exoneree who had spent nearly 30 years in prison for murder before his conviction was vacated.

The 4-3 decision leaves Calvin Duncan with little path forward to try assuming the role of Orleans Parish clerk of criminal court, a job he won in a landmark election last year before Republican lawmakers raced to eliminate the office this spring.

In a blistering dissent, the court’s Democratic justices said the ruling opened the door to allowing Louisiana lawmakers to subvert the will of voters. The court’s conservative majority disagreed, writing that “this change was entirely within the authority of the Legislature.”

The court also rejected the New Orleans City Council’s attempt to hold a special election, which would have given Duncan the option to run again.

“At a time when our voting rights are under unprecedented attack, this decision clarifies that if we want to live in a democracy, we have to fight for it with every tool our system of government provides,” Duncan said in a statement.

Signed by Republican Gov. Jeff Landry, the bill eliminating the New Orleans clerk’s office was championed by GOP lawmakers as a necessary step toward government efficiency. Supporters denied that it had anything to do with Duncan or his past.

Democrats blasted the change as overreach from a largely white, conservative Legislature that they accused of seeking to thwart the will of a predominantly Black city. Those tensions surfaced again last month when Landry signed a new congressional map that eliminated one of the state’s two majority-Black House districts.

Duncan was convicted of a 1981 murder and was released from prison in 2011. In 2021, an Orleans Parish district judge vacated Duncan’s sentence, finding he had been unjustly convicted and the charges against him were dropped. Duncan is listed on the National Registry of Exonerations.

Brook writes for the Associated Press.

May 29 (UPI) — Louisiana’s Republican-led legislature on Friday voted to approve a new congressional map that eliminates one of two majority-Black districts in favor of Republican-leaning districts, pushing forward the national redistricting race.

The new map contains one majority-Black district — in a state with a population that is one-third black — that covers an arc running from Baton Rouge to New Orleans, covering a smaller section of the state, NBC News and The New York Times reported.

Louisiana is the latest state to enact rare mid-decade congressional redistricting efforts, which were kicked off when President Donald Trump last year started pushing Republican led states to do so, leading to Democratic-led states to join in a year-long tit-for-tat contest.

The new map follows a Supreme Court ruling in the Louisiana vs. Callais case earlier this month that invalidated a 2024 map because the state’s legislature was not justified in using race to construct the districts.

The map, based on voting records, is expected to send five Republicans and one Democrat to the House from Louisiana, compared to the old map’s four-to-two split.

“We focused on Democrat numbers, not the racial numbers, when drawing,” Republican state Rep. Beau Beaullieu said during debate over the map.

“We focused in this case on partisanship, which is what Callais said, and I mentioned in my intro, is clear permissible,” Beauillieu said.

Republican Louisiana Gov. Jeff Landry is expected to sign the new map into law.

Landry had pushed off the state’s May 16 congressional primaries, for which some mail-in votes had already been cast, and delayed it until Nov. 3 so that the legislature could produce a new map for use in this year’s federal elections.

During the debate on the Thrusday, Democratic state Rep. Kyle Green Jr. pointed out that the map reduced Black Louisianians’ “minority opportunity representation to a single seat out of six, from 33% of the population to 16% of the representation numbers.”

The map is expected to be challenged in court, but members of both parties in the state legislature said that the map is unlikely to change again before November’s elections.

BATON ROUGE, La. — Louisiana lawmakers passed a new congressional map Friday designed to pick up a Republican seat while leaving the state with just one of its two majority-Black House districts represented by Democrats.

Approval of the new House map came a month after the U.S. Supreme Court struck down the state’s current map as an illegal racial gerrymander, weakening the landmark 1965 federal Voting Rights Act. That decision intensified a national redistricting battle fueled by President Trump’s efforts to protect the Republicans’ slim House majority in the midterm elections.

Louisiana Republicans had considered drawing a map giving the party a shot at winning all six of the state’s U.S. House seats. But that would have required adding more Black voters to Republican-held districts, potentially backfiring with losses. Some Republicans said a 5-1 map better protects U.S. House Speaker Mike Johnson from facing a difficult reelection.

Republican Gov. Jeff Landry is expected to sign the new map into law.

In the weeks following the Supreme Court’s decision, several other Republican-controlled Southern states have seized upon a weakened federal Voting Rights Act to try to redraw their own congressional districts. It’s the latest flare-up in a heated national redistricting battle heading into the November elections, spurred along by Trump.

So far, Republicans are winning the redistricting contest. But that doesn’t necessarily mean they will win a narrowly divided U.S. House in November. So far, Republicans think they could gain as many as 14 seats from their redistricting efforts, while Democrats think they could gain six seats from new districts in California and Utah.

In Louisiana, Republicans currently hold four of six congressional seats on a court-ordered map drawn in 2024 to comply with the Voting Rights Act by including a second district with a majority-Black population.

That map, however, was challenged in court, and the Supreme Court responded on April 30 by striking it down as an illegal racial gerrymander.

Landry postponed the state’s U.S. House primary, scheduled for May 16, until later this summer to allow time for Republican lawmakers to draw and pass a new map.

The proposed map redraws Democratic U.S. Rep. Cleo Fields’ district, clustering it around predominantly white communities in the Baton Rouge area and southern Louisiana. It also adds part of Baton Rouge to a heavily Democratic, majority-Black district based in New Orleans currently represented by Democratic U.S. Rep. Troy Carter.

More lawsuits were expected over the new map.

Democrats say the proposed map could still constitute a racial gerrymander because it packs Black voters into a single congressional district. Meanwhile, the plaintiffs in the U.S. Supreme Court’s decision criticized the Legislature’s map for leaving a majority-Black district in place.

Several other Southern states also have acted on redistricting since the Supreme Court’s decision.

Florida’s Legislature passed new congressional districts just hours after the ruling, completing a redrawing that was in the works in anticipation of the decision. It could yield Republicans as many as four additional seats in the midterm elections.

Tennessee adopted new U.S. House districts a week after the ruling, carving up a majority-Black district based in Memphis in a Republican attempt to win an additional seat.

In Alabama, Republicans are attempting to pick up another seat by redrawing two districts where Black residents compose a majority or close to it. Democrats hold both seats, and the proposal is mired in a court battle.

South Carolina’s Senate, meanwhile, decided against redistricting, despite pressure from Trump.

Brook and Levy write for the Associated Press.