Jerry Brown's Legacy: A $6.1 Billion Budget Surplus in California

Jerry Brown's Legacy: A $6.1 Billion Budget Surplus in California

Gov. Jerry Brown was in full professor mode as he unveiled chart after giant chart on Wednesday morning inside the Capitol, laying out California's financial situation and his plans for the coming year.

California has faced 10 recessions since World War Two, and the state must prepare for the 11th, Brown said.

"We can talk about spending now and cutting later, or filling the reserves and continue our spending right along", Brown said.

Brown's new General Fund budget is a record $131.7 billion, a 4.1% increase over previous year. This year's budget includes a $5 billion increase for the voter-approved Proposition 2 "rainy day" fund, increasing its allocation to $13.5 billion. It includes $2.8 billion to fix roads, highways and bridges. While Brown points out pension obligations would be even higher were it not for the modest pension reforms enacted in 2012, the escalating pressure of retirement obligations on the state, school districts, counties and cities will be felt for years to come, at great cost to taxpayers.

In addition to transportation, Brown's budget also takes aim at the state's estimated $67 billion in deferred maintenance. "Let's not blow it now".

"The good news is that California now has a substantial budget surplus", said Assemblyman Jay Obernolte, R-Hesperia, vice-chairman of the Assembly Budget Committee.

The Legislature's Democratic majorities have signaled that they think some of the surplus should be used to bolster social programs, particularly those for the very poor.

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According to the Department of Finance's budget summary on higher education, the total reflects growth of $892.8 million ($621.8 million General Fund and local property taxes and $271 million other funds) compared to revised 2017-18 expenditures.

"You have our piggy bank, which is the Rainy Day Fund". He also would allocate $3 billion for K-12 schools through local control funding to put more money in the hands of schools that have higher concentrations of impoverished students and English learners. The Legislature discusses the budget proposal and, with a majority vote, must pass budget bills by June 15.

The Legislative Analyst's Office projects general fund revenue of $135 billion for the upcoming budget year, nearly $40 billion more than the state collected eight years ago.

The governor's spending plan would allocate $4.6 billion in new transportation funding in fiscal 2018-19 including $2.8 billion to fix neighborhood roads, state highways and bridges, $556 million for trade and commute corridors, $200 million for high-priority transportation projects and $721 million for passenger rail and public transit modernization.

California lawmakers haven't missed a budget deadline in the past six years since voters passed a constitutional amendment to lower the threshold for passing a spending plan, which essentially wrote Republicans out of the process, and barred lawmakers from being paid until a spending plan was passed.

Brown's budget includes $18.7 billion for transportation programs and improvements, up from the $18.1 billion allocated past year, a modest 3 percent increase. To justify this approach, he highlighted how the volatile California tax structure that is swelling coffers now has previously forced massive budget cuts during recessions - including the $27 billion deficit he inherited back in 2011.

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