Gov. Jerry Brown and legislative leaders reached an agreement Thursday on a new budget to fund state government, a proposal highlighted by $400 million in low-income housing subsidies as well as expanded funding for child care and early learning programs.

The plan received its first public vetting by the Legislature’s budget conference committee Thursday evening. A formal vote by both the state Senate and Assembly would come later, though the timing remains unclear. California’s new fiscal year begins July 1.

“We’re on a very good path right now and I think we can all be proud of what we’re going to be delivering to the people of California,” said state Sen. Mark Leno (D-San Francisco).

The housing money would come with strings attached, according to administration officials who had been briefed on the details, and it could not be spent unless lawmakers loosened regulations on homebuilders.


Housing has been one of the most talked about issues during the spring budget season at the state Capitol, and Brown has urged lawmakers to streamline the process for building new housing units.

The agreement comes almost one week before the constitutional deadline for a new budget, an early compromise that’s likely a sign of just how few contentious issues there were between Brown and his fellow Democrats.

The governor offered a concession to Democrats when revising his budget last month, agreeing to a $2-billion bond measure aimed at mental health needs for the homeless. Legislators responded by embracing Brown’s January proposal to divert an extra $2 billion into the state’s rainy-day fund, an effort to cushion against any economic downturn that might be on the horizon. Both of those items are in the final agreement reached Thursday.


As part of the budget deal, rates paid to state-subsidized child care providers are being ramped up to keep pace with California’s increasing minimum wage. The extra funding is expected to total $500 million annually starting in 2019.

News of the expanded effort on child care programs for low-income families was welcomed by members of the Legislative Women’s Caucus, which made the issue its top priority.

“This is going to be the biggest appropriation in a decade,” said Assemblywoman Cristina Garcia (D-Bell Gardens), the caucus’ vice chairwoman. “We’re trying to be progressive and think about the future.”

Lawmakers would also repeal a 20-year-old rule known as the maximum family grant, which prevents mothers from receiving additional welfare assistance if they have another child.


“It’s been a long overdue process of eliminating a rule that everyone knew was unfair,” said Chris Hoene, executive director of the California Budget & Policy Center, a nonprofit that advocates for programs aimed at low-income families. “It’s good news that they’re finally doing that.”

Under the change, families would receive an extra $136 per month per child. An estimated 130,000 children in 95,000 families would benefit.

“It’s the difference between making a rent payment or being put out on the street,” said Frank Mecca, executive director of the County Welfare Directors Assn. of California. “For a family living on or below the edge, it’s going to make a huge difference.”

The budget agreement boosts funding for both the University of California and California State University systems if more in-state students are admitted. UC’s money requires the system to place a new cap on out-of-state student enrollment.


On housing, the budget deal represents a promise to address the priorities of both Democratic legislators and Brown.

Democrats in the Assembly had pushed for the new housing subsidies money as the state’s affordability crisis has continued to spiral. Brown had resisted, saying subsidies didn’t deliver enough bang for the buck. Instead, he proposed clearing some local regulatory hurdles for developers if they reserved units in their projects for low-income residents.

The budget now incorporates both demands, as the new housing money is contingent on lawmakers approving Brown’s proposal at a later date.

liam.dillon@latimes.com, chris.megerian@latimes.com, john.myers@latimes.com


Twitter: @dillonliam, @ChrisMegarian, @johnmyers

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Updates from Sacramento

UPDATES:

7:54 p.m.: This article was updated throughout with additional details about the budget and a committee meeting Thursday night.

This article was originally published at 6:02 p.m.