Brown signs budget relying on taxes

9:28 PM, Jun 27, 2012   |    comments
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SACRAMENTO - Gov. Jerry Brown has signed a new budget for California that relies heavily on voters approving his proposed tax hikes in November.

State lawmakers passed final budget implementing bills Wednesday before Brown signed the main bill ahead of a midnight deadline.

"This budget reflects tough choices that will help get California back on track," Brown said in statement. "I commend the Legislature for making difficult decisions, especially enacting welfare reform and across-the-board pay cuts. All this lays the foundation for job growth and continuing economic expansion."

RELATED STORY: Budget goes to governor for signing, possible vetoes

California's spending plan for the fiscal year starting July 1 includes welfare and social service cuts. Brown held off on signing the budget until Democrats who control the Legislature agreed to deeper cuts.

Brown's tax initiative would raise the sales tax by a quarter cent to 7.5 percent for four years, and boost income taxes on people who make more than $250,000 a year for seven years.

If voters reject the tax initiative, a series of automatic cuts will be triggered, largely on public schools.

MORE: Read the statement released by Brown's office

A statement released by Brown's spokesperson outlined some details in the budget:

Increases Funding for Education
Under this budget, funding for K-12 education and community colleges will receive an increase of 14 percent, subject to voter approval of the Governor's initiative. Funding will increase from $46.9 billion in last year's budget to $53.6 billion this year.

Keeps Higher Education Affordable for Low-Income Students
The budget protects Cal Grants for students attending public universities. To ensure the program is cost-effective, the budget prohibits colleges and universities that are unable to meet minimum performance standards from participating in the program.

Protects Public Safety
The budget continues to fund local governments that are implementing public safety Realignment. It includes a permanent funding structure so that local governments will have a reliable funding source into the future.

Cuts State Employee Compensation Costs
The budget includes a 5 percent cut to state employee compensation for a savings of $800 million.

Reforms Welfare
The budget restores the CalWORKs program's focus on self-sufficiency and employment by establishing a 2-year time limit for parents who are not meeting federal work requirements.

Builds Reserve of Nearly $1 Billion
The budget has a reserve of $948 million to protect the state against unforeseen costs.

Restructures Funds for Trial Courts
The budget restructures trial court funding and reduces General Fund support by $246 million on a one-time basis and requires each trial court to use their available reserves. The budget delays court construction for a savings of $240 million and includes $125 million in ongoing savings.

Reduces Corrections Spending and Implements Long-Term Corrections Solutions
In April 2012, the Brown Administration released a comprehensive plan to save billions of dollars, end federal oversight and improve the prison system. As a result of this plan, the California Department of Corrections and Rehabilitation expects to save $1 billion in 2012-13 and $1.5 billion in 2015-16 while satisfying the U.S. Supreme Court's order to reduce the prison population.

The Associated Press and News10/KXTV

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