By Sharon Bernstein
SACRAMENTO, Calif. (Reuters) - California lawmakers passed a $115.4 billion budget on Friday as part of a deal with Democratic Governor Jerry Brown to hold back spending even though the state's financial picture continues to improve.
The budget for the fiscal year that begins July 1 includes $2 billion to pay down the state's so-called wall of debt and socks away $4.6 billion into a rainy day fund pushed by Brown and enacted by voters last fall.
The package stops short, however, of funding goals set by progressive Democrats in the legislature aimed at restoring recession-era cuts in services for the poorest Californians and those with developmental disabilities.
Democratic leaders scaled back about $2 billion worth of additional spending proposals as part of a deal with Brown, who has forcefully steered a fiscally moderate path for the state.
"We shall remain committed to those who have been marginalized in this great state," said Senate Democratic leader Kevin de Leon, who along with other Democratic leaders said he would continue pressing to repair the state's tattered social safety net.
The Republican minority welcomed Brown's insistence on using conservative estimates of the state's revenues as a way to guide spending.
But they cautioned that even with Brown's foot on the brake, the overall amount spent by the state on services and government operations was still increasing.
"I applaud the Governor for convincing the rest of his tax-and-spend colleagues to exercise restraint," said Republican Assemblyman Brian Jones, who represents part of San Diego County. "However, in just 5 years, Democratic leadership has increased spending by roughly 24 percent."
The budget, which is expected to be signed by Brown, increases funding for education and includes a new earned income tax credit for the working poor worth about $380 million.
It also includes $2 billion to fund efforts to reduce the impact of the state's ongoing drought, an amount Republicans said was not enough.