Government shutdown fizzles on spending, immigration deal in Congress

Clouds pass over the U.S. Capitol at the start of the third day of a shut down of the federal government in Washington, U.S., January 22, 2018.

By Susan Cornwell and Richard Cowan

WASHINGTON (Reuters) – Congress voted on Monday to end a three-day U.S. government shutdown, approving the latest short-term funding bill as Democrats accepted promises from Republicans for a broad debate later on the future of young illegal immigrants.

The fourth temporary funding bill since October easily passed the Senate and the House of Representatives. President Donald Trump later in the evening signed the measure, largely a product of negotiations among Senate leaders.

Enactment by Trump of the bill allowed the government to reopen fully on Tuesday and keep the lights on through Feb. 8, when the Republican-led Congress will have to revisit budget and immigration policy, two disparate issues that have become closely linked.

The House approved the funding bill by a vote of 266-150 just hours after it passed the Senate by a vote of 81-18.

Trump’s attempts to negotiate an end to the shutdown with Senate Democratic leader Chuck Schumer collapsed on Friday in recriminations and fingerpointing. The Republican president took a new swipe at Democrats as he celebrated the Senate’s pact.

“I am pleased that Democrats in Congress have come to their senses,” Trump said in a statement. “We will make a long term deal on immigration if and only if it’s good for the country.”

Immigration and the budget are entangled because of Congress’ failure to approve a full-scale budget on time by Oct. 1, 2017, just weeks after Trump summarily ordered an end by March to Obama-era legal protections for young immigrants known as the “Dreamers.”

The budget failure has necessitated passage by Congress of a series of temporary funding measures, giving Democrats leverage each step of the way since they hold votes needed to overcome a 60-vote threshold in the Senate for most legislation.

With government spending authority about to expire again at midnight on Friday, Democrats withheld support for a fourth stopgap spending bill and demanded action for the Dreamers.

‘DREAMERS’

The roughly 700,000 young people were brought to the United States illegally as children, mainly from Mexico and Central America. They mostly grew up in the United States.

Former President Barack Obama’s Deferred Action for Childhood Arrivals, or DACA, program gave the Dreamers legal protections and shielded them from deportation.

Democrats, as a condition of supporting a new spending stopgap, demanded a resolution of the uncertain future Trump created for the Dreamers with his DACA order last year.

But Democratic leaders, worried about being blamed for the disruptive shutdown that resulted, relented in the end and accepted a pledge by Republicans to hold a debate later over the fate of the Dreamers and related immigration issues.

Tens of thousands of federal workers had begun closing down operations for lack of funding on Monday, the first weekday since the shutdown, but essential services such as security and defense operations had continued.

The shutdown undercut Trump’s self-crafted image as a dealmaker who would repair the broken culture in Washington. It forced him to cancel a weekend trip to his Mar-a-Lago estate in Florida.

The U.S. government cannot fully operate without funding bills that are voted in Congress regularly. Washington has been hampered by frequent threats of a shutdown in recent years as the two parties fight over spending, immigration and other issues. The last U.S. government shutdown was in 2013.

Both sides in Washington had tried to blame each other for the shutdown. The White House on Saturday refused to negotiate on immigration issues until the government reopened.

On Monday, Trump met separately at the White House with Republican senators who have taken a harder line on immigration and with moderate Democratic Senators Joe Manchin and Doug Jones.

Reuters/Ipsos polling data released on Monday showed Americans deeply conflicted about the immigration issue, although majorities in both parties supported the DACA program.

‘WHY DO WE HAVE TO WAIT?’

Some liberal groups were infuriated by the decision to reopen the government.

“Today’s cave by Senate Democrats – led by weak-kneed, right-of-center Democrats – is why people don’t believe the Democratic Party stands for anything,” said Stephanie Taylor, co-founder of the Progressive Change Campaign Committee.

Markets have absorbed the shutdown drama over the past week.

U.S. stocks advanced on Monday as each of Wall Street’s main indexes touched a record intraday level after the shutdown deal.

For Jovan Rodriguez of Brooklyn, New York, a Dreamer whose family came from Mexico when he was 3 years old and ultimately settled in Texas, the latest development was more of the same.

“Why do we have to wait – again? It’s like our lives are suspended in limbo,” he said. And they have been for months. I don’t trust the Republicans and I don’t trust (Senate Majority Leader Mitch) McConnell with just a promise. That’s not good enough any more.”

(Additional reporting by David Morgan, Ginger Gibson, Amanda Becker, Blake Brittain, Susan Heavey, Steve Holland, Diane Bartz, Lucia Mutikani, Yasmeen Abdutaleb and Patricia Zengerle in Washington, Megan Davies in New York and Sharon Bernstein in Sacramento, Calif.; Writing by Doina Chiacu; Editing by Alistair Bell and Peter Cooney)

Government workers begin shutdown as Senate vote looms

The U.S. Capitol is lit during the second day of a shutdown of the federal government in Washington, U.S., January 21, 2018.

By Amanda Becker and Richard Cowan

WASHINGTON (Reuters) – Hundreds of thousands of federal workers began shutting down operations on Monday with the U.S. government closed and the Senate prepared to try again to restore funding, if only temporarily, and resolve a dispute over immigration.

As government employees prepared for the first weekday since the shutdown began at midnight Friday, U.S. senators were to vote at midday on a funding bill to get the lights back on in Washington and across the government until early February.

Support for the bill was uncertain, after Republicans and Democrats spent all day on Sunday trying to strike a deal, only to go home for the night short of an agreement.

Federal employees received notices on Saturday about whether they were exempt from the shutdown, White House budget director Mick Mulvaney said. Depending on their schedules, some were told to stay home or to go to work for up to four hours on Monday to shut their operation, then go home. None will get paid.

Senate Majority Leader Mitch McConnell said late Sunday that an overnight vote on a measure to fund government operations through Feb. 8 was canceled and would be held at 12 p.m. EST (1700 GMT) on Monday.

Up until Monday, most federal workers were not directly affected by the shutdown that began at midnight on Friday.

The federal Office of Personnel Management said on its website on Sunday night that “federal government operations vary by agency.”

The Department of Defense published a memo on its website detailing who does and does not get paid in a shutdown and saying that civilian employees were on temporary leave, except for those needed to support active-duty troops.

The Department of Interior led by Secretary Ryan Zinke, offered no guidance on its website, which still had a “Happy Holidays from the Zinke Family” video near the top of the site. The department oversees national parks and federal lands.

The State Department website said: “At this time, scheduled passport and visa services in the United States and at our posts overseas will continue during the lapse in appropriations as the situation permits.”

Markets have absorbed the shutdown drama over the last week, and on Monday morning world stocks and U.S. bond markets largely shrugged off Washington’s standoff even as the dollar continued its pullback. U.S. stock futures edged lower.

‘DREAMERS’ DRAMA

The U.S. government has not been shut down since 2013, when about 800,000 federal workers were put on furlough. That impasse prevented passage of a needed funding bill centered on former Democratic President Barack Obama’s healthcare law.

The problem this time focused on immigration policy, principally President Donald Trump’s order last year ending an Obama program called Deferred Action for Childhood Arrivals (DACA), which gave legal protections to “Dreamer” immigrants.

The “Dreamers” are young people who were brought to the United States illegally as children by their parents or other adults, mainly from Mexico and Central America, and who mostly grew up in the United States.

Trump said last year he would end DACA on March 5 and asked Congress to come up with a legislative fix before then to prevent Dreamers from being deported.

Democrats have withheld support for a temporary funding bill to keep the government open over the DACA issue. McConnell extended an olive branch on Sunday, pledging to bring immigration legislation up for debate after Feb. 8 so long as the government remained open.

Senate Democratic leader Chuck Schumer objected to the plan and it was unclear whether McConnell’s pledge would be enough for Democrats to support a stopgap funding bill.

Congress failed last year to pass a complete budget by Oct. 1, the beginning of the federal fiscal year, and the government has been operating on a series of three stopgap spending bills.

Republicans control both the House of Representatives and the Senate, where they have a slim 51-49 majority. But most legislation requires 60 Senate votes to pass, giving Democrats leverage.

Trump told a bipartisan Senate working group earlier this month that he would sign whatever DACA legislation was brought to him. The Republican president then rejected a bipartisan measure and negotiations stalled.

McConnell had insisted that the Senate would not move to immigration legislation until it was clear what could earn Trump’s support.

Republican Senator Jeff Flake, who is involved in bipartisan immigration negotiations, said McConnell’s statements on Sunday indicated there was progress in negotiations and he urged his Democratic colleagues to approve another stopgap bill.

(Additional reporting by Ginger Gibson and Damon Darlin; Editing by Peter Cooney and Jeffrey Benkoe)

Republicans seek to hasten tax reform with budget action

The U.S. flag flies in front of the Capitol Dome. REUTERS/Joshua Roberts

By David Morgan

WASHINGTON (Reuters) – The Republican-controlled U.S. Congress moved to hasten its overhaul of the U.S. tax code on Thursday by moving closer to agreement on a budget resolution, a procedural step that would help advance eventual tax legislation.

The House of Representatives voted 219-206 to adopt a fiscal 2018 spending blueprint containing a legislative tool that would let Republicans bypass Democrats and pass a tax bill by a simple majority vote in the Senate, where they hold 52 of 100 seats.

Separately, the Republican-led Senate Budget Committee was expected to approve its own budget resolution later on Thursday and send it to the full Senate for a vote, likely in two weeks.

President Donald Trump and top Republicans in Congress are determined to enact tax legislation before January. House Republicans could unveil tax legislation by the end of October.

“We are closer than ever to finishing what we have started for the American people,” said House tax committee Chairman Kevin Brady, whose panel is crafting an initial tax bill.

But the Republican plan to slash taxes by up to $6 trillion for corporations, small businesses and individuals has run into difficulties since it was announced last week.

It has been assailed by Democrats as a strategy for benefiting the wealthiest Americans while hiking taxes on some middle class Americans and cutting spending on social programs including the Medicare and Medicaid healthcare programs.

Republican lawmakers are also pushing back on a proposal to help pay for tax cuts by eliminating popular tax deductions. Some Republican fiscal hawks have also warned they will not back a tax reform package that adds to the federal deficit.

The Trump tax plan would add about $2.4 trillion to the deficit over the next decade, said the nonpartisan Tax Policy Center, a Washington tax think tank, at a time when the national debt already exceeds $20 trillion.

“Where is all that money coming from?” Representative John Yarmuth, the top Democrat on the House Budget Committee, asked on the House floor. “If you’re listening to this and you’re not a millionaire, probably from you.”

In the Senate, Democrats sought to hamstring the Republican budget resolution with amendments that would prevent tax legislation from benefiting the wealthy, raising taxes on the middle class and adding to the deficit. Democrats also called for an end to reconciliation, the legislative procedure that would sideline them in a Senate vote.

Republicans also faced the danger of the sort of internal infighting that torpedoed their repeated attempts to repeal the Affordable Care Act, known as Obamacare.

Eighteen House Republicans joined 188 Democrats to vote against the budget resolution, leaving the measure to pass by only one vote more than the minimum necessary.

The vote also set up a potential clash between House and Senate Republicans.

The House resolution requires tax reform to be revenue neutral, meaning that it would not lose revenues and add to the deficit. The Senate plan allows tax legislation to add $1.5 trillion to the deficit over a decade before raising enough revenues to cover the cost of tax cuts.

(Reporting by David Morgan; additional reporting by Amanda Becker; editing by Kevin Drawbaugh and Nick Zieminski)

Philippine president’s Senate foes, allies vow to block budget cut for rights body

FILE PHOTO: Philippine President Rodrigo Duterte gestures as he delivers his speech, during the oath taking of Philippine National Police (PNP) star rank officers, at the Malacanang Presidential Palace in Manila, Philippines August 30, 2017. REUTERS/Romeo Ranoco

By Enrico Dela Cruz

MANILA (Reuters) – Philippine President Rodrigo Duterte’s critics and allies in the Senate vowed on Wednesday to block a lower house move to slash the annual budget of a public-funded human rights agency opposed to his bloody war on drugs to just $20.

The house, dominated by Duterte’s supporters, voted on Tuesday to allocate a 2018 budget of just 1,000 pesos ($20) to the Commission on Human Rights (CHR), which has investigated hundreds of killings during the president’s ferocious anti-narcotics crackdown.

Vice President Leni Robredo, who was not Duterte’s running mate and has locked horns with him numerous times, said the lawmakers’ move effectively abolishes the CHR, a constitutional body.

Duterte’s signature campaign has left thousands of mostly urban poor Filipinos dead. Critics say the lawmakers are trying to retaliate against the CHR for pursuing allegations of executions by police during sting operations, which police deny.

The CHR is among the domestic and foreign rights groups that Duterte frequently admonishes, accusing them of lecturing him and disregarding Filipinos who are victims of crimes stemming from drug addiction.

The upper house minority bloc, composed of six staunch critics of the president, will seek to restore the 678 million peso budget the government and a Senate sub-committee had proposed for the CHR.

Senator Risa Hontiveros described the plan to cut the budget to almost nil as “a shameless rejection of the country’s international and national commitments to champion human rights”.

Several allies of Duterte in the 24-seat chamber said they would scrutinize the house move and try to ensure the commission had a budget that would allow it to work properly.

Senator Richard Gordon said the CHR had a job to do and should not be restricted.

“That is their role – to expose possible abuses,” he said.

Another legislator, JV Ejercito said senators would not make the CHR impotent.

“The CHR is in the thick of things and very relevant nowadays and probably even next year and the years to follow because of what’s happening,” he said in a statement.

Duterte once threatened to abolish the CHR after its chief, Chito Gascon, sought to investigate alleged abuses by police anti-drugs units.

Duterte on Tuesday appeared to distance himself from the lawmakers proposing the meager budget. He said CHR was constitutionally created and should probe whatever it wants, adding he was “not here to destroy institutions”.

“He had it coming. He opens his mouth in a most inappropriate way. He knows nothing,” Duterte said, referring to Gascon.

“The congressmen are really angry. I have nothing against him. Give them a budget for all I care, whatever he likes to investigate.”

 

(Additional reporting by Neil Jerome Morales; Editing by Martin Petty)

 

Seven U.S. states still without budgets a week into new fiscal year

FILE PHOTO: A general view of the joint session of the General Assembly in the House Chambers of the Illinois State Capitol in Springfield, Illinois February 1, 2012. REUTERS/Sarah Conard/File Photo

By Robin Respaut and Karen Pierog

(Reuters) – Seven U.S. states are still without budgets, nearly a week into the new fiscal year that started July 1.

Legislatures in Connecticut, Illinois, Massachusetts, Pennsylvania, Oregon, Rhode Island and Wisconsin remain in disagreement about how to close ongoing budget gaps in their states or fund new budget initiatives.

“We always have some states that go into the new fiscal year without budgets, but the number is a bit high this year,” said Eric Kim, a director at Fitch Ratings.

Weak revenues complicated budget negotiations in several states, while idiosyncratic issues pushed others beyond their June 30 deadlines.

The Illinois House was poised to take final budget action on Thursday by attempting to override the governor’s vetoes of a $36 billion spending plan and $5 billion tax hike approved by the Democratic-controlled legislature over the Fourth of July holiday weekend. A hazardous materials situation in the state Capitol in Springfield delayed the House session, but officials determined the substance was harmless and lawmakers were returning.

If enacted, the budget would mark Illinois’ first complete budget since 2015. No other U.S. state has lacked a budget for that long.

Thirty-three of the 50 U.S. states reported revenues that came in below projections in fiscal year 2017, the highest number of states since the recession decimated budgets in 2010, according to the National Association of State Budget Officers.

Connecticut and Pennsylvania have the most challenging revenue situations, according to Fitch, as lower-than-anticipated tax collections exacerbated budget gaps and led to disputes over how to close them.

Massachusetts, also amid a revenue shortfall, enacted a one-month interim budget for July to provide additional time to negotiate a full-year budget. Wisconsin legislators are working to close a transportation funding shortfall.

Oregon’s budget process includes multiple bills, most of which have been approved. But the legislature is still debating several measures, including changes to hiring practices.

Rhode Island had appeared ready to finalize a budget by June 30, but late last week the state Senate amended a House proposal to phase out an automobile tax, causing the House to halt the budget process.

Many states retain the authority to make debt service payments without enacted budgets.

Over the holiday weekend, several states came to last-minute budget agreements.

New Jersey and Maine ended partial government shutdowns just in time for the Fourth of July holiday on Tuesday, while governors of Washington state and Alaska signed new operating budgets late last week, hours before deadlines that would have triggered partial government shutdowns.

(Reporting by Robin Respaut in San Francisco and Karen Pierog in Chicago; Editing by Leslie Adler)

California governor, legislature agree on final budget

FILE PHOTO - California Governor Jerry Brown attends the International Forum on Electric Vehicle Pilot Cities and Industrial Development in Beijing, China June 6, 2017. REUTERS/Thomas Peter

By Robin Respaut

(Reuters) – California Governor Jerry Brown announced on Tuesday that state lawmakers had reached an agreement about the state’s 2017-2018 budget.

Both houses of the state legislature will likely vote on the new budget on Thursday, the constitutional deadline for lawmakers to adopt a budget bill.

California’s Department of Finance had not totaled the final budget numbers as of Tuesday morning, according to department spokesperson H.D. Palmer.

The budget adds $1.8 billion to the state’s rainy day fund, expands access to California’s Earned Income Tax Credit and boosts funding for schools and infrastructure repairs, according to the governor’s office. It also sends more money to the nation’s largest public pension fund, California Public Employees’ Retirement System (CalPERS), to help reduce the fund’s unfunded liability.

“This budget keeps California on a sound fiscal path and continues to support struggling families and make investments in our schools,” Brown said in a statement on Tuesday.

“This budget makes historic investments in healthcare, education, and childcare, and lays down a multi-billion dollar investment to start fixing our roads and infrastructure,” said Senate President pro tem Kevin de León.

Brown proposed a state budget in January for the new fiscal year and revised his budget up 2.2 percent to $183.4 billion in May.

(Reporting by Robin Respaut; Editing by Chizu Nomiyama)

Wall Street rises on investor relief after Trump budget

A trader works inside a booth on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2017. REUTERS/Brendan McDermid

By Sinead Carew

(Reuters) – Wall Street ended higher on Tuesday after the release of President Donald Trump’s budget plan but gains were tempered by declines in consumer discretionary stocks amid weakness in auto-parts companies.

While Tuesday’s economic data was weak, investors were relieved Trump’s first full budget plan was largely as expected, even if it is not expected to be approved in Congress.

“There were no large surprises. The market is pleased with that,” said Wade Balliet, Chief Investment Strategist at Bank of the West.

Trump’s budget called for a hike in infrastructure and military spending, along with a raft of politically sensitive cuts, in areas such as healthcare and food assistance programs, with the aim of chopping government spending by $3.6 trillion and balancing the budget over the next decade.

The S&P 500 ended below its session high. It topped 2,400 points a few times during the session for the first time since the markets’ plunge last Wednesday on concerns about the future of Trump’s presidency.

While the President is on an overseas trip, stocks were helped by a lack of major news updates related to the government probe on possible ties between his election campaign and Russia.

“With the President being away, with the news cycle slowing a little bit, investors have nibbled their way back in,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

“This market has had tremendous strength on the idea that the new administration is going to be able to push through a pro-business platform. To the extent it loses political credibility the market has had trouble holding these gains.”

The Dow Jones Industrial Average <.DJI> rose 43.08 points, or 0.21 percent, to 20,937.91, the S&P 500 <.SPX> gained 4.4 points, or 0.18 percent, to 2,398.42 and the Nasdaq Composite <.IXIC> added 5.09 points, or 0.08 percent, to 6,138.71.

In the morning, U.S. economic data showed new single-family home sales in April tumbled from near a nine-and-a-half-year high, while manufacturing activity for May fell to the lowest level since September.

Ten of the 11 major S&P 500 sectors ended higher. Financials <.SPSY> rose 0.8 percent, helped by a 1.2 percent gain in the bank subsector <.SPXBK>.

Consumer discretionary <.SPLRCD> was the biggest laggard with a 0.4 percent drop.

The biggest drag on the consumer sector was Autozone Inc <AZO.N>, down 11.8 percent to $581.4. The auto part retailer’s quarterly results missed expectations. Advance Auto Parts <AAP.N> fell 4.6 percent while O’Reilly Automotive <ORLY.O> fell 3.3 percent and Genuine Parts <GPC.N> shares fell almost 2 percent.

Advancing issues outnumbered declining ones on the NYSE by a 1.48-to-1 ratio; on Nasdaq, a 1.11-to-1 ratio favored advancers.

The S&P 500 posted 49 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 81 new highs and 59 new lows.

About 5.95 billion shares changed hands on U.S. exchanges, below the 6.9 billion average for the last 20 sessions.

(Additional reporting by Tanya Agrawal, Gayathree Ganesan in Bengaluru; Editing by Savio D’Souza and Nick Zieminski)

Illinois’ unpaid bills reach record $14.3 billion

FILE PHOTO - Bruce Rauner talks to the media after a meeting with Barack Obama at the White House in Washington December 5, 2014. REUTERS/Larry Downing/File Photo

By Karen Pierog and Dave McKinney

CHICAGO (Reuters) – Illinois’ unpaid bill backlog has hit a record high of $14.3 billion as the legislature nears a May 31 budget deadline, the state comptroller’s office said on Wednesday.

The bill pile jumped from $13.3 billion after the governor’s budget office this week reported more than $1 billion in liabilities held at state agencies, the comptroller said.

Illinois is limping toward the June 30 end of its second straight fiscal year without a complete budget due to an impasse between Republican Governor Bruce Rauner and Democrats who control the legislature.

“It’s clear the Rauner Administration has been holding bills at state agencies in an attempt to mask some of the damage caused by the governor’s failure to fulfill his constitutional duty and present a balanced budget,” Comptroller Susana Mendoza, a Democrat, said in a statement, adding that the governor’s office was keeping lawmakers in the dark about the true size of the backlog.

Eleni Demertzis, Rauner’s spokeswoman, said instead of the “same tired partisan attacks,” Mendoza should be talking “to her party leaders about working with Republicans to pass a budget that is truly balanced and job-creating changes that will grow our economy.”

Lawmakers face a May 31 deadline to pass budget bills with simple-majority votes. The Senate on Wednesday passed pieces of a long-awaited package to stabilize state finances, including for the current and upcoming fiscal years, authorization to borrow $7 billion to pay down the bill backlog and an overhaul to state pensions.

But the House-bound legislation faces an unclear future. The Senate defeated legislation to implement the budget bill, putting its fate in doubt, while Rauner remains another question mark.

He has conditioned his support of a budget on passage of changes to workers compensation laws and a long-term freeze on property taxes. A bill for a two-year local property tax freeze fell four votes shy in the Senate, leaving a significant opening for the governor to reject the entire Democratic-crafted spending package.

The busy legislative day also included Senate passage of a gambling-expansion bill authorizing a Chicago-owned casino and a school funding revamp that allocates $215 million to help Chicago’s cash-strapped schools pay teacher pensions this year.

Rauner’s office rejected the school bill, but did not immediately comment on the other legislation.

Illinois’ reliance on continuing appropriations, court-ordered spending and partial budgets has caused the unpaid bill backlog to balloon from $9.1 billion at the end of fiscal 2016.

(Editing by Meredith Mazzilli and Matthew Lewis)

California Controller warns that economic downturn may be near

FILE PHOTO - The California flag flies above City Hall in Santa Monica, California, U.S. on February 6, 2009. REUTERS/Lucy Nicholson/File Photo

By Robin Respaut

SAN FRANCISCO (Reuters) – California’s state tax collections in April fell short of expectations, a sign that the state may be headed toward an economic downturn, State Controller Betty Yee warned on Wednesday.

Collections totaled $15.98 billion, $1.05 billion or 6.2 percent short of the governor’s projected budget for the month.

“April is usually the state’s biggest tax filing month, so lower-than-expected personal income tax receipts are troubling,” said Yee, the state’s chief fiscal officer, in a statement.

“While we await the governor’s May Revision, this is another signal that we may be inching towards an economic downturn, and we must tailor our spending accordingly.”

California has collected $96.88 billion during the first 10 months of fiscal 2017, which ends June 30. That means the state is $1.83 billion behind last summer’s budget estimates and $211.3 million shy of January’s revised fiscal year-to-date predictions.

Governor Jerry Brown plans to release on Thursday his mid-year revision of the proposed state budget for fiscal 2018. The revised budget is expected to reflect changes in the state’s financial position since January.

For the month of April, during which California tends to collect about 17 percent of its personal income tax receipts, collections lagged by 5.3 percent. Retail sales and use tax receipts fell short of projections in the governor’s proposed 2017-18 budget by $106.7 million, or 13.3 percent. Corporation tax receipts for April were 13.8 percent lower than estimates in the budget.

In January, Governor Brown proposed a $179.5 billion state budget for fiscal 2018, a 5 percent increase over this year, but he warned that the state must remain fiscally prudent ahead of an inevitable economic downturn.

California is especially vulnerable to downturns, because the state is more reliant than most on capital gains taxes, a volatile revenue source, and less on property tax revenue, which is more stable.

(Reporting by Robin Respaut; Editing by Richard Chang)

Uganda seeks $2 billion for South Sudan refugees at planned summit

South Sudanese refugee families displaced by fighting gather at Imvepi settlement in Arua district, northern Uganda, April 4, 2017. REUTERS/James Akena

By Elias Biryabarema

KAMPALA (Reuters) – Uganda hopes to raise $2 billion in donations at a U.N. refugee summit next month to help fund relief operations for refugees flowing in from neighboring South Sudan, Prime Minister Ruhakana Rugunda said on Tuesday.

The east African country hosts a total of 1.2 million refugees, of which almost 800,000 are South Sudanese who fled the world’s youngest country since the outbreak of civil war.

Rugunda said Uganda faced difficulties in coping with the influx, which ballooned recently since the latest wave of violence erupted in July.

“The … numbers are placing a huge strain on our already stressed ability to cater for food,” he told a news conference.

“We are hoping that … we will be able to raise $2 billion from the summit,” he said in Kampala, where the U.N.-hosted gathering is set to be held.

The conflict in the oil-producing country began when President Salva Kiir fired his deputy Riek Machar in 2013, two years after the country won independence from neighboring Sudan.

The fighting that followed split the country along ethnic lines, spurred hyperinflation and plunged parts of the nation into famine, creating Africa’s biggest refugee crisis since the Rwandan genocide in 1994.

The latest bout of warfare erupted in July, less than a year after both sides signing a peace pact in 2015.

Rugunda said the money Kampala sought to raise from the summit would fund relief operations for the next twelve months from June.

Uganda has won plaudits for its liberal refugee policy that maintains open borders and allocates land plots to individual refugee families.

Kampala also grants refugees free movement and employment in the country, as well as some public services such as free education and healthcare.

Rugunda said Uganda expected an additional 400,000 refugees to arrive in the country this year “because of the recurring cycles of insecurity and instability in the region.”

(This version of the story corrects prime minister’s name to Rugunda in first, 3rd paras.)

(Reporting by Elias Biryabarema; Editing by Aaron Maasho and Tom Heneghan)