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brownbudget.jpgGov. Jerry Brown and legislative leaders have reached agreement on major elements of the state budget, including a controversial school funding proposal and other issues, sources said.

In a victory for the Democratic governor, sources said the agreement will largely assume the more conservative revenue estimates proposed by Brown. Legislative Democrats had urged about $2 billion more in spending on state services and programs than Brown proposed, after the state's nonpartisan legislative analyst issued a rosier economic forecast than Brown's.

In a compromise on Brown's proposal to overhaul the state education system and to shift more money to poor and English-learning students, all school districts would receive additional base revenue.

In addition, Senate Democrats are poised to get $206 million to improve mental health services, including $142 million in one-time general fund money. They are also expected to receive about $80 million to restore Medi-Cal adult dental benefits.

Assembly Democrats would receive approval for implementation of middle-class college scholarships, a priority of Assembly Speaker John A. Pérez.

The college scholarship and mental health programs are expected to take effect next year.

Money was freed up for expanded programs by reducing the amount of money Brown proposed to give schools to pay down debts owed under Proposition 98, California's school-funding guarantee, the sources said. The agreement also assumes nearly $300 million in higher property tax revenue and savings of about $85 million to $90 million in the state expansion of Medi-Cal.

The Bee's Jim Sanders contributed to this report.

Editor's note: This post updated at 2:55 p.m. to include that college scholarship funding and a mental health program expansion would take effect next year under the budget deal.

PHOTO: Gov. Jerry Brown unveils his revised budget plan for the fiscal year at a press conference at the Capitol, on May 14, 2013, in Sacramento. The Sacramento Bee/Renée C. Byer



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