California Leaders Reach Budget Deal With More Homeless, Higher Education Spending

California state leaders said Friday that they've reached a budget deal that included hundreds of millions of dollars more for combating homelessness and for the state's public universities than Gov. Jerry Brown initially proposed.

The deal comes after a month of negotiations and one week before the constitutional deadline for lawmakers to approve a spending plan.

Brown, who inherited a $27 billion shortfall when he came into office in 2011, has worked to put the state back on solid fiscal footing, including by building its budget reserves.

But in recent years, as the economy has recovered and the state coffers have swelled with cash, Democratic lawmakers have pushed Brown to reinvest in programs that were slashed during the recession.

In May, Brown's office announced a projected $8.8 billion surplus for the fiscal year that begins July 1. He proposed using about half that money for one-time expenditures, including improving levees and other flood control infrastructure; and giving state universities, facilities and courts about $2 billion to tackle years of deferred maintenance to their facilities.

The governor also proposed sending $359 million to local governments to address homelessness. Legislative aides said Friday that lawmakers did succeed in getting Brown to increase that spending to $500 million.

"After detailed discussions, California is on the verge of having another on-time, balanced budget,” Brown said in a written statement. “From a $27 billion deficit in 2011, the state now enjoys a healthy surplus and a solid Rainy Day Fund.”

State leaders echoed the need to build up a reserve in Brown's final budget.

“From day one, we knew we needed to prepare for the inevitable economic downturn," said Senate President pro Tempore Toni Atkins. "That is why this budget balances fiscal responsibility with social responsibility."

The new investment in homeless aid comes far short of the whopping $1.6 billion that Assembly leaders had sought in negotiations. Most of that money would have been distributed as block grants to local governments.

Still, Assembly Speaker Anthony Rendon struck a positive tone after Friday's announcement.

“No single budget can capture all the opportunities California has, or meet all the challenges we face — but the smart and sensible choices in this budget absolutely move California closer to where we want and need to be,” he said.