Capitol Alert

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California lawmakers sent bills to Gov. Jerry Brown on Thursday that would allow the state to borrow $865 million from earmarked state accounts and K-12 districts to continue busing their students this school year.

The Democratic governor supports both measures, though his office has not said when he will act on them.

Senate Bill 81 would help rural and urban students that rely heavily on buses by transforming a $248 million mid-year transportation cut into a general-purpose reduction that hits all 1,042 school districts evenly. Some rural districts stood to lose more than $1,000 per student; under SB 81, all districts will lose about $42 per student.

The bill had bipartisan support in both houses, though some suburban Republicans have objected because their districts long ago reduced bus service and now face a larger cut under SB 81.

The Senate and Assembly also approved Senate Bill 95 allowing the state to borrow $865 million from earmarked accounts, most of which fund transportation. It is part of a plan to ensure the state does not run out of cash to pay its priority bills in early March.

Controller John Chiang said this week that without $3.3 billion in additional borrowing and payment delays, the state will fall below its comfortable cash cushion for several weeks starting Feb. 29. Chiang said that by March 8, the state would end up $730 million in the red.

Besides the internal borrowing in SB 95, the state plans to ask Wall Street for a short-term loan, have the University of California borrow on the state's behalf and delay payments to Medi-Cal hospitals and counties.

In other action, both houses passed Senate Bill 98 to reinstate the Board of Registered Nursing through 2015 after Brown vetoed a bill last year to extend its existence. The governor said he objected to last year's proposal, Senate Bill 538, because it would have expanded pension benefits for board investigators.

Jim Sanders and Dan Smith contributed to this report.



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