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Reaction To Governor Brown’s Budget

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Sacramento, CA — Governor Jerry Brown’s 2014-15 budget proposal calls for $106.8 billion in spending, and he touted plans to pay down the “wall of debt.”

The Governor reported during a press conference that $11 billion will be used to pay off debts and liabilities. It includes $6 billion in money that had been deferred from schools, and $4 billion to pay off economic recovery bonds passed during the Schwarzenegger administration. In addition, $1.6 billion will go into a “rainy day” fund.

Brown also touted that the budget includes money to expand healthcare, help public safety, and public transportation.

District 5 Republican Assemblymember Frank Bigelow had a mixed reaction. “Governor Brown struck the right tone in his budget proposal by continuing to call for fiscal discipline in how we spend the people’s hard earned tax dollars,” he said. “But I was disappointed to see caution thrown out the window with the proposal to spend cap-and-trade dollars to prop up the high speed rail mess.”

Central Valley Republican Assemblymember Kristin Olsen says there is plenty to “like and dislike.”

“I wish that he had allocated more reserves,” says Olsen. “A $1.6 billion deposit into the rainy day fund, a mere one percent of the total budget, is simply inadequate.”

Senate Democratic Leader Darrell Steinberg offered praise for how California is on solid fiscal ground, after years of deep deficits. “For the second straight year, we are not arguing about what to cut,” he said. “The Governor’s budget reflects an approach that, in general, I think is wise. I’ve long said that we should put money away for a rainy day. And I’ve also said, that we shouldn’t be shy to say that there is room, in this type of economy and budget, to invest and re-invest in California’s economy and its people.”

The Governor’s Office has released the following information, which Brown believes are the highlights of his new budget plan:

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. And 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.

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