Apropos to the rainy weather in Turlock this week, California Governor Jerry Brown on Tuesday proposed a state budget which will increase California’s Rainy Day Fund to almost $8 billion. The $179.5 billion state budget for the 2017-18 fiscal year is a 5 percent increase from this year, which in turn will eliminate a projected $2 billion deficit.
In a letter to the Legislature, Brown referred to the budget as “the most difficult we have faced since 2012,” citing that the surging tide of revenue increases the state has enjoyed over the past few years have turned. Despite new taxes that state voters passed in November, Brown warned that the state must remain fiscally cautious in light of a period of uncertainty and lower-than-expected revenue.
At $2 billion, the projected economic downturn is much smaller than the $27 billion the state faced in 2011, but still calls for immediate attention.
“Small deficits can quickly mushroom into large ones if not promptly eliminated,” said Brown in the letter.
Senator Tom Berryhill (R-Twain Harte) disapproved of the Governor’s cautious spending.
"Worrying about problems that have yet to happen is one way to deflect attention from the problems we continue to ignore,” said Berryhill. “My priorities remain the same: fixing our transportation infrastructure; improving the economy in all of California — not just the coastal regions; helping rural communities deal with the tree mortality crisis; keeping college affordable for California residents and making prudent spending decisions. All the hand wringing in the world about changes in Washington, D.C. won't hide the fact that Sacramento has yet to make good on its current promises to the voters."
The budget, which includes a $122.5 billion general fund, is balanced and bolsters the state’s Rainy Day Fund while increasing funding for state reserves, education, healthcare expansion and transportation infrastructure. The plan also proposes ways to counteract poverty while rolling back expenses discussed during last year’s budget negotiations.
The plan would raise $43 billion over the next 10 years through various sources, which include increased gasoline and diesel taxes and a new $65 fee on all vehicles.
District 12 Assemblyman Heath Flora disapproved of the proposed additional taxes, referring to the $10 billion in new statewide taxes approved by voters in 2016, such as Measure L, which Stanislaus County voters overwhelmingly approved to help fund transportation infrastructure.
“In addition to all of these new voter-approved taxes, the Governor has proposed an additional $4.2 billion in new gas taxes while the Capitol Democrats have proposed an additional $7 billion,” said Flora. “I cannot support an increase in gas prices while Californians are already paying some of the highest prices in the country at the gas pump.
“If we want to fix our roads then we are going to need a skilled workforce. The best way to insure that California has the workforce it needs is to develop workforce training and education. My Republican colleagues and I have a plan that we are unveiling in response to the Governor’s budget proposal, and I am excited for the job opportunities it could bring the Central Valley.”
Brown plans to increase education funding, with California’s public schools and colleges receiving the largest share of the budget. K-14 funding is expected to grow to $73.5 billion, up from $71.9 billion in the current fiscal year. For K-12 schools, funding levels will increase by about $725 per student in 2017-18, increasing from $25,401 in 2016-17 to $26,126 in the upcoming fiscal year.
The state plans to continue its healthcare expansion, and under the provisions of the federal Affordable Care Act the budget expands enrollment of the Medi-Cal population to 4.1 million Californians – an increase of about $800 million.
The budget also aims to strengthen transportation infrastructure, and includes total funding of $18.1 billion for all programs administered within the Transportation Agency, including Caltrans, the California Transportation Commission, the High-Speed Rail Authority, the Department of Motor Vehicles, the California Highway Patrol and the Board of Pilot Commissioners. First outlined in September 2015, the Governor’s transportation funding and reform package provides $4.2 billion annually to improve the maintenance of highways and local roads, expand public transit and strengthen critical trade routes.
The budget will also continue to fund ways to help those in poverty, which includes:
· The rising state minimum wage, which is scheduled to increase to $11 per hour in 2018 and $15 per hour over time;
· California's Earned Income Tax Credit;
· Cost-of-living adjustment for Supplemental Security Income/State Supplementary Payment recipients;
· The repeal of the maximum family grant rule in CalWORKs, which denied aid to children who were born while their parents were receiving aid;
· Increases in child care and early education provider rates and children served totaling $837 million.
Senator Anthony Cannella (R-Ceres) was able to take some positives from the proposed budget, applauding the Governor for his forethought on the state’s budget deficit.
“I am encouraged that Governor Brown’s budget reflects the need for cutting red tape and spending prudence given our debt situation,” said Cannella. “I am also pleased that the Governor has made fixing our transportation system a top priority this year. Key to recovery in the Central Valley is creating jobs, and moving people to jobs and products to market are important steps.
“I hope that as we move forward through the budget process we focus on our water availability problems and fixing some core programs, like Denti-Cal,” he continued.
The full summary of the Governor’s budget proposal can be found at www.ebudget.ca.gov.