Citing an improved fiscal outlook since his original state budget proposal in January, Governor Jerry Brown unveiled his revised $124 million spending plan Thursday which rolls back original cuts meant for schools and child care, but keeps other controversial cuts intact.
The amended budget plan provides an additional $1.5 billion in general fund spending – most of which will go toward K-12 education. Brown is also dialing back a plan to cut a half-billion dollars for child care for low-income families.
The plan keeps in place other cuts proposed in January that have angered Democratic lawmakers, however, such as the elimination of the middle-class college scholarship program, and Brown warned that the state could face a harsh deficit from an impending economic downturn or federal budget cuts sought by President Donald Trump and House Republicans.
"Over the past four years, we have increased spending by billions of dollars for education, health care, child care and other anti-poverty programs. In the coming year, I don't think even more spending will be possible," said Brown. "We have ongoing pressures from Washington and an economic recovery that won't last forever."
Brown warned once again, as he did when he first revealed the budget plan in January, that California is overdue for a recession that would have devastating consequences for the state budget, which relies heavily on taxing income and investment gains of wealthy taxpayers. To combat this, the budget also provides a Rainy Day Fund, which holds 10 percent of all tax revenues. By the end of 2017-2018, the fund will have a total balance of $8.5 billion.
He also retreated from a proposal to pass $600 million in costs to counties to provide care for seniors and people with disabilities. After negotiating with county officials, the latest proposal now would shift just $141 million next year, which will grow to $250 million in four years.
The new proposal also withholds $50 million from the University of California to “hold their feet to the fire” following a revealing audit of the school system. The money may be released once administrators prove they’ve made progress on spending recommendations and other reforms.
Assemblyman Heath Flora (R-Ripon) criticized the revised budget, which he said uses tax payer dollars from Prop 56, or the Tobacco Tax, for purposes other than what they were originally intended for. The measure approved by voters last November was meant to produce funds to reimburse Medi-Cal providers. Instead, the funds have been set aside to help pay for general Medi-Cal funding.
“That money was promised to go towards increasing access to dental and health care, but the Governor is openly exploiting these funds to backfill the state budget,” said Flora. “Last month I voted against Senate Bill 1 which would increase the state's Gas Tax and vehicle registration fees by $54 billion, but the tax still passed. How are we to ask ourselves to pay more when the state already has a proven track record of raiding transportation funding (and now the Tobacco Tax) for other purposes?”
Funds from the recently approved Road Repair and Accountability Act of 2017 (SB 1) will provide $2.8 billion of funding to focus on investments to repair neighborhood roads, state highways and bridges, match locally generated funds for high-priority transportation projects and invest in passenger rail and other public transit modernizations.
Senator Tom Berryhill (R-Twain Harte) was displeased by the revised budget, citing that the plan slashes career technical education in high schools and ignores the lack of affordable housing in the state. The billions of dollars in projected revenue for 2017-2018, he added, prove that SB 1 was an unnecessary measure.
“We have the money to improve transportation infrastructure without the awful and onerous recent gas tax and vehicle fee increases,” said Berryhill. “One-third of the state's renters spend more than half their income on rent, and now they are going to be gouged for even more money while driving to jobs that are often pay far too little. What does this budget tell them? The coastal elites' priorities are not the same as those of hard-working Californians."
While local legislators like Flora and Berryhill found the revised budget unsatisfactory, Senator Anthony Cannella (R-Ceres) is “cautiously optimistic” regarding the Governor’s latest approach.
“We have to be prepared for an inevitable economic downturn and ensure sustainability by making the Rainy Day Fund a top priority,” said Cannella. “At the same time, Californians should expect that their tax dollars are aimed at preparing our youth for the workplace through increased funding for career technical education and fundamental programs, like Denti-Cal.”
The Legislature has until June 15 to approve a budget for the fiscal year starting July 1. Additional details on the Governor's May Revision can be found at www.ebudget.ca.gov.