Just days into 2012, the effort to pass a state budget has already begun.
Governor Jerry Brown fired the first salvo of the budget year with a proposal combining cuts to welfare and child care with tax increases on the wealthy to balance the budget.
“The budget that I am submitting today keeps the cuts made last year and adds new ones,” Brown wrote in his budget message to the legislature. “The stark truth is that without some new taxes, damaging cuts to schools, universities, public safety, and our courts will only increase.”
The $92.6 billion budget hinges on $6.9 billion to be generated through two new taxes collected through 2016: a half-cent sales tax increase, and an increased income tax on the wealthy. Brown said he will pitch those taxes to voters, who must approve any tax hikes, as devoted solely to education.
The income tax rate increase would amount to 1 percent for singles who make between $250,000 and $300,000, 1.5 percent for those earning between $300,001 and $500,000, and 2 percent for those making more than $500,000. The cutoffs are doubled for those filing jointly.
Should those taxes fail to pass, Brown's proposal calls for trigger cuts to K-12 education equivalent to three weeks of the school year, courts, flood control, fish and game, one in five park rangers, and all state park lifeguards.
State Republican leadership continues to express concern with new taxes, noting that budget projections see that a recovering state economy should nearly eliminate deficit spending by 2016. But Brown's proposal will provide a jumping off point for a budget debate expected to last until summer.
“The budget presented by Governor Brown today is a good starting point,” said State Sen. Anthony Cannella (R-Ceres). “We must tackle the wall of debt and look at solutions that will make long term reforms to control spending.”
CSU officials worried at ‘flat’ budget proposal
While Brown has termed California State University funding in his proposal as “flat” compared to 2010-2011 – $2 billion – the CSU officials note the system underwent a $750 million cut last year, setting a 15-year low in funding. At the time, the CSU believed the cut to be short term; Brown's proposal appears to make the cut permanent.
The proposal concerns CSU Chancellor Charles B. Reed, who advocates a reinvestment in higher education to stimulate the economy.
"Our campuses have done everything they can just to get through this fiscal year with a $750 million budget cut," Reed said. "We have only survived by implementing numerous cost cutting measures, being extremely prudent with resources, and spending down one-time reserves. However, we are just about out of options, and if the state does not begin to reinvest in the CSU, we will need to take more drastic measures including cutting enrollment and programs, raising tuition and reducing personnel."
Should taxes not pass, the trigger cuts also call for a further $200 million reduction in state support for both the University of California, and the CSU system. Should the cut trigger, the CSU would receive $1.8 billion, the lowest level of state funding since 1996-1997, despite enrolling an additional 95,000 students.
Social service cuts planned
Regardless of the new taxes, Brown's proposal calls for $4.2 billion in cuts – mostly to social services.
Those cuts would reduce child care programs by 40 percent, move Medi-Cal and Medicare recipients into managed care plans, eliminate parts of in-home supportive services, and half welfare aid from four years to two. Families on welfare with children would see a slight reprieve, continuing to receive 80 percent of their past allotment after the two-year cutoff.
While the cuts may seem sharp, Brown characterizes them as needed to balance the budget and set California back on a path to fiscal stability.
“As California's economy continues to slowly recover – and recover it will – our plan will provide fiscal stability and make California government more transparent and responsive to the people,” Brown wrote.
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