Vowing to keep California on a path to long-term fiscal stability, Gov. Jerry Brown on Thursday proposed a balanced budget that pays off more than $11 billion in debt and builds a lasting rainy day fund while continuing to invest in public schools and expand health care coverage for millions.
“With a decade of intractable deficits behind us, California is poised to take advantage of the recovering economy and the tens of thousands of jobs now being created each month,” said Gov. Brown. “But given the vagaries of the business cycle, we must be ever vigilant in the commitment of public funds. Wisdom and prudence should be the order of the day.”
When Gov. Brown took office, the state faced a massive $26.6 billion budget deficit and estimated annual shortfalls of roughly $20 billion. Since then, the state has eliminated these deficits with billions of dollars in cuts and new temporary revenue approved by California voters.
Assembly Republican Leader Connie Conway of Tulare said that, overall, the budget appears to be fiscally restrained, with Brown recognizing the debt and looking for solutions.
She remained concerned about correctional realignment, and would have liked to have seen more in state reserves or the “rainy day fund.”
In addition, Conway said she didn't see any preparation for drought, “which I consider to be an emergency already.”
Conway added, “We'll all be talking for the next few weeks about what this really looks like at the end of the day.”
Lake County's representatives in the state Legislature gave Brown's budget high marks.
“I applaud the continued restraint and responsibility reflected in Gov. Brown’s budget proposals. Attention to our state hospitals and developmental centers, along with additional resources to strengthen protections for some of our state’s most vulnerable residents is also encouraging,” said Assemblymember Mariko Yamada (D-Davis).
However, Yamada had concerns about the blanket prohibition of federally-authorized overtime for In Home Supportive Services caregivers.
Said Sen. Noreen Evans (D-Santa Rosa), “For the first time in 10 years, I feel confident California will regain its luster as the Golden State.”
In 2009 the Legislature was forced to agree to numerous cuts to vital state services such as CalWORKS and higher education or to borrow from other funds, including education and transportation, Evans said.
“The impact to Californians was severe. Working families, women and children of our state bore the brunt of those cuts and have done so since then,” she said.
“I commend Governor Brown on beginning to address the worst of the damage, to restore reductions in funding in critical areas, and repay funds borrowed from transportation and education. In the long run, investments in these programs will ensure economic recovery for every Californian,” Evans said.
California Community Colleges Chancellor Brice W. Harris also gave his support for the budget.
“After years of budget cuts forced us to turn away hundreds of thousands of students, Gov. Brown’s proposal is welcome news for California and for the economy,” Harris said. “With an 11.4 percent increase in funding we are now on the way to adding back the much needed classes that will restore our system's ability to provide educational opportunities for those seeking to improve their lives at community colleges.”
Significant details of the 2014-15 State Budget:
Maintaining long-term fiscal stability
The budget maintains the state’s fiscal stability by strengthening and investing in the state’s rainy day fund and continuing to pay down the “wall of debt” – the most immediate liability constraining the ability of the state to emerge from its fiscal troubles.
Specifically, the budget makes a $1.6 billion payment into the state’s rainy day fund – the Budget Stabilization Account – which marks the first deposit since 2007, and also directs $967 million to a Special Fund for Economic Uncertainties.
In lieu of Proposition 58 and ACA 4, the budget proposes a constitutional amendment to bolster the state’s rainy day fund.
The budget also continues to address the $25 billion wall of debt, directing more than $11 billion to pay off past budgetary borrowing.
This debt, which totaled $34.7 billion in 2011, will be eliminated entirely by 2017-18 under this budget.
Investing in education
The budget provides an infusion of $10 billion in new Proposition 98 funding this year. For K-12 schools, funding levels will increase by $3,410 per student through 2017-18, including an increase of more than $2,188 per student in 2014-15 over 2011-12 levels.
This reinvestment provides the opportunity to correct historical inequities in school district funding with continued implementation of the Local Control Funding Formula, which directs additional resources to students who need the most support – English language learners, low-income students and foster youth.
The budget also provides the second year of guaranteed increases in funding of $142.2 million each for the University of California and the California State University systems – predicated on a continued freeze on increases in student tuition and fees.
Addressing climate change and water sustainability
The budget proposes to invest $850 million of cap and trade auction proceeds to support efforts to reduce greenhouse gases, with an emphasis on assisting disadvantaged communities.
To advance the Governor’s Water Action Plan, the budget also proposes $619 million to help expand water storage capacity, improve drinking water in communities where available supplies are substandard, increase flood protection and increase regional self-reliance.
Strengthening the state’s infrastructure
The budget reflects the release of the state’s five-year infrastructure plan – last produced in 2008 – and includes an $815 million package of investment to address critical deferred maintenance projects in state parks, on highways, local streets and roads and at K-12 schools, community colleges, courts, prisons, state hospitals and other state facilities.
Implementing federal health care reform
The budget invests $670 million in new general fund dollars to expand Medi-Cal benefits, including mental health, substance use disorder, adult dental and specialized nutrition services.
The full summary of the governor’s budget proposal can be viewed at www.ebudget.ca.gov or at www.dof.ca.gov .