Governor's leaked budget balances saving, spending

11:07 PM, Jan 8, 2014   |    comments
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The state Capitol's calendar leapfrogged ahead by some 30 hours on Wednesday, when Gov. Jerry Brown's new budget plan was leaked to the public and the press ahead of schedule.

The surprise news pushed Brown's plans up by a day for a statewide media blitz to promote his budget, with news conferences now slated for Thursday at the Capitol, in Los Angeles and in San Diego.

The full budget outline offers what could be seen as the governor's world view with 2014 just beginning -- an improving economy that he doubts is permanent, and a delicate balance between Brown's quest for less debt and more long-term investment.

"Economic expansions do not last forever," says one of the opening passages in the 2014-2015 proposed state spending plan. And it's clear that Brown and his advisers believe the state's extra cash is largely an anomaly, referred to time and again in the 271 page document as a "windfall."

In all, the Brown administration believes the state will collect an unexpected $6.3 billion between now and the summer of 2015. They attribute the vast majority of that to capital gains profits of California's highest income earners, an amount also boosted by 2012's passage of the Proposition 30 temporary taxes.

The $154.9 billion budget, like many before it, looks to make public schools the biggest winner. But Brown does this in two distinct ways -- first, by proposing the complete payback of $6 billion in education funding deferred from recession years, and then by doubling the initial budget contribution to his 2013 reworking of school funding that favors low income and English learner students.

In all, say budget documents, California school funding will grow by almost $2,200 per student from its 2011-2012 levels, with an additional $1,300 per student boost in the next three years. Brown also proposes a boost for both the University of California and Cal State University systems.

And, in a nod to his fellow Democrats in the Legislature, the governor is calling for expanded funding of Medi-Cal, the state's health care for the poor and a five percent increase in grants for welfare-to-work assistance.

But compared to legislative demands, Brown's budget is again likely to be seen as, on the whole, more fiscally cautious. It has no mention of a Democratic legislative priority -- transitional kindergarten for four year olds -- and even some of its social services boosts seem to come with strings; an increase in funding for in-home supportive care would also ban overtime pay for those home care workers, possibly resulting in fewer hours of assistance.

The governor takes aim at the state's water needs, from possible assistance on the all-but-official 2014 drought to long term projects (though most of the dollars are to come from selling bonds, not the state's general fund).

And, as promised, he proposes using a significant portion of revenues from California's cap-and-trade climate change auctions to subsidize the cash-strapped high speed rail project: $250 million, plus an additional $50 million for "rail modernization" projects.

A key focus of discussion over the coming months at the statehouse will likely be what kind of 'rainy day' reserve fund California should have. Here, Brown seems to endorse a proposal similar to one suggested by legislative Democrats for voters to consider on the Nov. 4 ballot. But he also does something that hasn't happened since 2007: a payment into the existing reserve fund, the state's budget stabilization account created by 2004's Proposition 58. Brown would allow $1.6 billion -- a larger reserve than most years in recent times -- to be transferred for future needs.

While the details of what Governor Brown will be selling are now clear, it still remains to be seen just how he will sell it -- both inside the hallways of the Capitol, and outside Sacramento to the public in an election year in which most political watchers expect he'll be on the ballot for another four year term.


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