Brown Hurriedly Unveils His New Budget Plan — Five Days Sooner Than Planned
Cuts – mainly in aid to the state’s poor – and a like amount of temporary tax increases would close a projected $9.2 billion budget hole under Gov. Jerry Brown’s budget plan released January 5.
The Democratic governor moved up the spending blueprint’s unveiling from January 10 after it was inadvertently posted on his Department of Finance’s website earlier in the day.
Brown’s presenting of his plan is the first step in a six-month process in which he and the Democratic majority Legislature stitch together a final budget for the fiscal year beginning July 1., which could have elements far different that those in the governor’s plan.
“The budget that I am submitting today keeps the cuts made last year and adds new ones,” Brown said in an accompanying message. “The stark truth is that without some ne taxes, damaging cuts to schools, universities, pubic safety and our courts will only increase.”
The $9.2 billion shortfall — $4.1 billion of it from a predicted deficit in the current fiscal year – is significantly lower than the $26.6 billion gap between revenue and spending commitments Brown faced when he took office one year ago.
Brown’s tax plan, which he intends to place on the November ballot, would boost state income taxes on those earning $250,000 or more and add one-half cent to the sales tax. Both increases would expire in 2017.
The budget proposal starkly lays out the either/or proposal Brown is trying to impress on voters.
Either “approve a temporary tax increase on the wealthy” and a “modest and temporary increase in the sales tax” or face the following:
A $4.8 billion cut in state support to public schools and community colleges – the equivalent of three weeks of instruction, the budget notes.
Reductions of $200 million each for the University of California and the California State University system. Likely to be at least partially offset by tuition hikes.
State courts, already struggling with a $350 million reduction in this year’s budget, would face further cutbacks of $125 million, the equivalent of closing courts three days each month, the budget says.
Flood control projects, state firefighting capabilities and the number of wardens and rangers would also be curtailed Brown says.
Even if voters approve Brown’s tax increase, he proposes an additional $4.2 billion in spending reductions – more than half in health and human services programs for the poor.
Nearly $1 billion in savings would come from changes in CalWORKS, the state’s welfare program. Among the changes, allowing recipients to keep more income from outside jobs. Families who don’t meet work requirements would see their benefits reduced.
Brown would have beneficiaries of both federal Medicare and Medi-Cal, the state’s health care program for the poor, be served by one health plan which he says will lower costs through more efficient delivery of services. That would save $842 million.
Schools would also see a $544 million drop due to recalculating the amount they are owed by the state.
State aid to financially needy students attending private universities would be reduced by $302 million and “dozens” of the 50 state-imposed mandates on localities suspended for the past two years would be eliminated, saving $828 million.
Brown said he assumes a portion of his proposals will be approved by the Legislature before March 1 to achieve the maximum amount of savings.
Lawmakers said they were reluctant to cut deeper without a better idea of what revenue the state actually collects during the first four months of the year.
“Between revenue estimates by the Legislative Analyst’s Office in November and the Department of Finance’s numbers in December, projected revenues increased $1.5 billion,” said Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat.
“If that trend continues even slightly, we may avoid the need to make the kinds of cuts the governor now suggests. While in the end we may have to cut more, doing it now should be a last resort.”
California Republican Party Chairman Tom Del Beccaro was less measured in his reaction to Brown’s proposed spending plan:
“In just a year’s time, Governor Brown has gone from ‘checking in with the voters’ to holding them hostage with supposedly devastating trigger cuts that mask his inability to make tough, reform-minded decisions.
“This cynical, scare tactic budget strategy once again hinges on the hope that voters will ignore their own financial problems to bail out the Democrats with another ill-advised tax increase. It didn’t work last year and there’s no reason to believe that a new year will bring new results.”
Lawmakers have until June 15 to rework – or reject – Brown’s plan and submit their revised budget for the fiscal year.
Filed under: Budget and Economy
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