SACRAMENTO, Calif. (AP) – State lawmakers returned to the Capitol on Monday for the second half of their two-year session, one that is expected to be marked by conflicts over spending or saving a budget surplus that was unthinkable just a couple of years ago.

Members of the Assembly and Senate appeared jovial during their opening sessions, but many were looking ahead to Friday, when Gov. Jerry Brown releases his budget proposal for the fiscal year that starts in July.

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The independent Legislative Analyst’s Office is projecting a $3.2 billion surplus, the first one in years, and many Democratic constituencies have their eye on the money after years of cuts to state programs. Several Democratic lawmakers already are advocating for higher spending on certain programs, although the party’s leadership is preaching a more conservative approach.

Speaker John Perez, D-Los Angeles, said his top priority will be securing California’s fiscal stability.

“The cornerstone of that has to be creating a rainy day fund so we do not replicate the patterns of spending and bust of the past,” Perez said after Monday’s session.

He said his proposals will align with the legislative analyst’s previous recommendations to set aside some of the funding and what he believes will be in the governor’s budget proposal.

“I think you will see that as the cornerstone for all decisions and how we govern ourselves,” Perez said. “Our first priority is fiscal discipline and establishing a rainy day fund for the future.”

California’s budget deficit was about $25 billion when Brown took office in 2011. He was able to close it in large part because of the national recovery from the recession and because he persuaded voters in 2012 to pass temporary increases to the state sales tax and income taxes for high earners.

Assembly Minority Leader Connie Conway, R-Tulare, urged spending prudence and noted that the extra money is still only a projection.

“How can we say we have a surplus of anything with the debt that the state has?” Conway told reporters. “I hope that there’s no movement to go and jump right in and spend money that, one, we don’t even have yet and two, if we have it, why are we spending it? Let’s wait and see what happens.”

Among those debts, which the governor has said need to be addressed, are unfunded pension liabilities and retiree health care costs for public employees of at least $300 billion.

Conway said she hopes Brown maintains his moderating stature as the “adult in the room.”

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Senate President Pro Tem Darrell Steinberg said while paying down the state’s long-term debt and building a budget reserve are priorities, so is restoring some programs.

“While fiscal stability is obviously first, we also have a responsibility to try to help put back and reinvest, especially in areas where people have been hurt the worst,” said Steinberg, D-Sacramento. “We’ll find that balance.”

Sen. Minority Leader Bob Huff, R-Diamond Bar, said the state needs to create a reserve fund that is sizable enough to weather a future economic storm, so “the disciplined thing to do is just to hold it in reserve right now,” he said.

Perez, Conway and Steinberg all are termed out of their current jobs at the end of the year, setting up internal political battles between lawmakers over the leadership posts. Steinberg said Monday that he hopes “to serve until the very end of my term.”

Also Monday, three Democrats who won special elections were sworn in to the Assembly, restoring the party’s two-thirds supermajority in that house: Sebastian Ridley-Thomas, of Los Angeles; Matt Dababneh, of San Fernando; and Freddie Rodriguez, of Pomona.

In the Senate, attention focused on Sen. Ron Calderon, D-Montebello, who returned to the capitol for the first time since a leaked FBI affidavit claimed he accepted nearly $90,000 as part of efforts to influence legislation.

After being previously stripped of his committee assignments, Calderon found his assigned seat in the Senate chambers moved from front-and-center to a far corner of the room, next to a vacant desk. He entered the chamber several minutes late, shaking hands with fellow Democratic Sens. Lou Correa, of Anaheim, and Mark Leno, of San Francisco, as he made his way across the front of the chamber to his seat.

In a statement emailed to The Associated Press on Monday, Calderon said he is looking forward to “working collaboratively on the important legislative issues facing our state and to continue addressing the needs of the people who elected me to represent them.”


Associated Press writer Don Thompson contributed to this report.


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