Brown's final budget plan proposes $132 billion in spending
SACRAMENTO, Calif. (AP) — Democratic Gov. Jerry Brown proposed a $131.7 billion state spending plan Wednesday, launching his final year of budget negotiations as he prepares to leave office.
Brown's proposal is up 5 percent from last year but includes little new spending on new programs. Once again warning that he believes a recession looms, Brown dedicated $5 billion toward the state's Rainy Day fund, more than is constitutionally required. He also proposed a new online community college program.
"It's not exciting, it's not funding good and nice things, but it's getting ready and that is the work of a budget," Brown said.
Notably, Brown's plan makes no changes related to federal tax changes out of Washington, which are expected to hit taxpayers in high-tax states like California the hardest. That's because Brown had to finalize his plan in December, before the federal changes were finalized. He said he expects to make revisions to his plan during ongoing negotiations with the Legislature. A final plan must be passed by lawmakers in June.
The spending plan also includes nearly $59 million in special funds and bonds, which are dedicated for specific purposes.
Republicans said the budget surplus shows Californians pay too much in taxes, with Assemblyman Tom Lackey of Palmdale saying it makes no sense that the state just raised gas and car taxes on drivers by $5 billion per year.
"In a perfect world, the surplus would be returned to taxpayers," added Assemblyman Jay Obernolte of Hesperia, the top Republican on the Assembly budget committee. In the alternative, both Republicans supported beefing up the state's reserve and limiting additional spending to one-time costs.
“California’s $7.5 billion surplus doesn’t belong to the state, it belongs to the people who paid taxes willingly to support this government. There will be members of the ruling party chomping at the bit to spend every cent of it. Instead of over-taxing the hardworking people of this state, we should lower tax rates and increase tax refunds, said Assemblyman Jim Patterson of Fresno. “When people have extra money in their bank account it allows them to spend a bit more, be a bit more generous to causes they care about and save in their own rainy day fund. Giving billions back to the people will be an incredible benefit to our economy.”
Brown's budget plan comes as California wages a multi-front battle with Republican President Donald Trump that has, so far, had little impact on the state's finances. California's tax collections over the past six months are billions above projections.
Last year, he signed a $125 billion budget that boosted payments for Medi-Cal doctors and dentists who provide care for the poor and increased funding for education and social services.
Brown has generally shied away from new ongoing spending that he says the state can't afford to sustain, preferring to use much of the state's higher revenue for one-time expenses like new state buildings or paying down debts for the pensions and health benefits of retired state workers.
His caution often puts Brown at odds with senior Democrats in the Legislature, who prefer to use the state's increasing inflow of tax revenues to lower college costs and strengthen the California's social safety net for the needy.
Assembly Democrats last month proposed $4.3 billion in new spending, including an expanded tax credit for the working poor and health coverage for immigrants living in the country illegally. They also proposed boosting reserves, including the state's Rainy Day Fund, by $3.2 billion.
Brown, who leaves office in a year, has focused much of his second stint as governor on stabilizing the state's long-term budgeting during a period of fiscal prosperity. Taking the reins as the state clawed out of the devastating Great Recession, he backed a ballot initiative that forced the state to save money and pay down debts.
He's presided over a stark turnaround in California's fiscal fortunes while warning that the next recession — and a steep drop in revenue — could be just around the corner. The state's budget has grown 45 percent since 2011, when he took office and includes more than $50 billion in additional revenue.