Capitol Alert: CA Democrats say they are closer to a budget deal with Jerry Brown

In a freshly updated budget plan, legislative Democrats showed Wednesday how they replace more than $1 billion in Gov. Jerry Brown's cuts to programs for the poor with a lower reserve and accounting changes.

Democrats now want a $544 million reserve, just over half of Brown's proposed $1.05 billion rainy-day fund and on par with last year's amount. They believe the state can gain $330 million through different accounting for K-14 education funds, as well as $250 million more than Brown projected from tax dollars that once flowed to defunct redevelopment agencies.

They also capture $50 million more than Brown did from a multi-state settlement with banks over mortgage abuses.

In a Capitol press conference, Senate President Pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez stressed that their budget meets Brown's requirements of being balanced over the next three fiscal years and then produces a surplus in 2015-16. They emphasized how close their proposal is to Brown's, but said they did not want to cut as deeply into the safety net.

"I strongly believe that the differences between the governor's proposal and our proposal are bridgeable," Pérez said. "Frankly, we're not only on the same page as the governor, we're in the same paragraph."

Democrats save $428 million from welfare-to-work, less than half of Brown's proposed $880 million savings. Most of their savings comes from a proposal that Brown officials say move the state in the wrong direction - exempting parents of young children from having to seek work to receive cash aid. The state saves money this way because it does not have to provide child care, transportation and job training to those families, though it also does not help move parents into employment.

Pérez cited high unemployment as a reason not to ask those welfare recipients to seek work, saying it is "inefficient and quite frankly foolish to invest in training for jobs that don't exist."

Brown cited that difference specifically in a statement he released Tuesday night as both sides remained at impasse. Democrats appear to have given some additional savings by requiring "child-only" cases - typically involving undocumented parents of legal children, disabled parents or parents who have timed out - to renew their welfare applications each year.

In other areas, Democrats kept cuts to a minimum. They said they save $271 million in child care rather than $452 million. Most of that cut results from another accounting change that draws on K-14 funds to pay for preschool for low-income children, according to the Legislative Analyst's Office. In theory, that reduces money available to schools, though there are no specifics on where that might be felt. Additionally, Democrats save $50 million by eliminating 6,600 child care slots, either through attrition or cutting off the highest-income families who qualify.

Democrats also maintain a 3.6 percent cut in hours for 423,000 in-home care recipients, though it is considered a "new" cut of $59 million because that reduction was set to expire June 30. They find $31 million more in savings from accessing federal funds and pointing veterans to Veterans Administration programs that can pay for the same in-home care.

Here's the latest spreadsheet comparing the plans:

Budget Spreadsheet

Post updated to correct wording of Pérez's quote.