Public Schools Win in Brown’s Revised Budget
Saying the state’s “multi-billion dollar increase in current-year cash receipts” is “short-lived,” Gov. Jerry Brown unveiled an updated budget May 14 that gives $2.9 billion of those receipts to public schools.
The $137 billion spending plan also earmarks additional money to Medi-Cal, the state’s health care program fro the poor, whose rolls will expand by more than 1 million persons when the federal Affordable Care Act takes effect January 1, 2014.
“It’s (a budget) that responds to our education and health challenges but unlike ones of the past it’s very prudent,” the Democratic governor told reporters at a Capitol press conference.
The principal anticipation about Brown’s announcement was how he planned to spend — or not spend — $4.5 billion in unanticipated tax revenue the state has received since January when Brown proposed his initial budget for the fiscal year beginning July 1.
Brown gave nearly all the unexpected cash to schools and community colleges – because he had to.
Formulas in place since 1988 dictate the annual contribution by the state to public schools.
In years when state revenues grow more rapidly than personal income, like this year, the state must increase its support for schools to reimburse them for past underpayments.
The state’s underpayments total some $9 billion.
Brown proposes that $1 billion to implement new academic standards known as “Common Core.”
An additional $1.6 billion retires some of the $8.2 billion in payments to schools that state has pushed off into future years in order to cover its own current obligations.
The Democratic governor’s January budget plan already includes retiring $1.9 billion in deferred payments. He plans to pay off the remaining deferrals by June 30, 2017.
Brown says this year’s spike in state revenue won’t occur in the fiscal year beginning July 1, lowering the amount the state owes schools by $1.8 billion. .
But his elimination of deferred payments this year means more cash in-hand for schools next year keeping their funding level essentially the same, year over year.
Filed under: Budget and Economy
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