California lawmakers return to the Capitol Monday facing two of the most vexing problems from last year: a looming $1 billion hole in funding for the state's health care program for the poor and a $59 billion backlog in road repairs needed over the next decade.
Gov. Jerry Brown called special sessions last year to address both issues, but he and lawmakers never came close to a deal on either, adding to the urgency this year.
Lawmakers are also eager to make big moves on signature issues such as climate change, higher education, income inequality and gun control. Ensuring a steady water supply to California's 39 million residents is also a priority after four years of drought.
"We'll remain focused on pursuing big and bold ideas, tackle important issues facing Californians and the nation," Senate President Pro Tem Kevin de Leon, D-Los Angeles, said.
The state's revenues are finally surging, potentially coming in $3.6 billion ahead of forecasts for fiscal 2015 with $12 billion in the state rainy day fund, according to the independent state legislative analyst.
That leaves both Democrats and Republicans with wiggle room to push for spending on social programs that were scaled back during the recession. The wish list includes paying more to doctors who treat patients in Medi-Cal, the state's health care program for the poor, boosting funding for the developmentally disabled and building more affordable housing.
But lawmakers will again be confronted with the Democratic governor's "less is more" spending approach when he releases his budget proposal, due by Jan. 10.
Lawmakers finished in August without coming up with a replacement for a major health care tax that will expire in June -- money needed to pay for the Medi-Cal program that has seen a surge in enrollees under the Affordable Care Act.
"We must hammer out a deal because we run the risk of a $1 billion hole in our general fund budget that has very real consequences, especially to the most vulnerable," de Leon said.
The governor's chief adviser, Nancy McFadden, has cautioned against relying on the extra tax money coming in, telling a Public Policy Institute of California panel in December that "just saying the general fund can pick this up doesn't cut it."
Even as more people enroll, the program faces a shortage of doctors since reimbursement payments were slashed by 10 percent during the recession.
"We've overpromised in California," said Senate Minority Leader Jean Fuller, R-Bakersfield. "We've promised that they'd have services but we're paying such a low rate that doctors are opting out."
Members of both parties also appear to agree that the state should boost funding for services to help the developmentally disabled, another group that absorbed cuts during the recession. Hundreds of disabled people rallied outside the Capitol last session but the final budget deal did not include more money for the program.
Fuller said taking care of this vulnerable population "is very clearly the state's responsibility."
And then there is the crumbling infrastructure. Brown's administration proposed a package of fees and taxes to fund a portion of the repairs in the final weeks of last year's session, but he has not been a public force in offering solutions.
Republicans have rejected the idea of taxes and fees, arguing that the state should return diverted transportation money and make major cuts to Caltrans before asking for more.
"We've done the new taxes over and over and over, and here we are again," Fuller said.
De Leon said he's optimistic about reaching a compromise, adding, "everyone needs to stretch a little bit."
Many of the lawmakers returning for the second year of a two-year session face re-election. Looming over the work of the Legislature are dozens of initiatives that could appear alongside them on the ballot in November.
Major proposals so far include a $2-a-pack tax on cigarettes for health care, extending voter-approved Proposition 30 income taxes on the wealthy, boosting the minimum wage to $15 an hour, legalizing recreational marijuana and a package of gun control measures proposed by Lt. Gov. Gavin Newsom.
Democrats in both houses are also expected to propose a gun control package in the wake of the San Bernardino shootings, including how to address so-called ghost guns built at home from parts, making them difficult to trace.
With so many issues up for grabs, only one thing is certain: Whatever tasks the Legislature is unable or unwilling to finish could be in voters' hands come November.
