Brown Released Budget - 5 Days Early


Governor Jerry Brown released his 2012 budget proposal this past Thursday, 5 days earlier than planned after it was inadvertently leaked on his Department of Finance website.

Following the accidental release, Brown held a press conference to address the specifics of his budget proposals for 2012-2013.

The plan proposes slashing nearly $1.4 billion in welfare and child care aid for the poor while holding voters liable for $5 billion in education funding contingent on this November tax initiative.  Brown estimates the state faces a $9.2 billion general fund deficit through June 2013, which he proposes to bridge primarily with cuts and taxes.  Brown wants to again ask voters to pass a $6.9 billion ballot measure in November that raises taxes on sales and income starting taxes on single filers earning $250,000 a year and raises the state sales tax by  .5%. The taxes would last through 2016.

"With the tax program, we will eliminate the budget deficit finally, after years of kicking the can down the road," Brown said.

Whether or not the taxes pass, Brown is asking for a base level of $4.2 billion in cuts, including the $946 million to welfare-to-work and $446 million to subsidized child care.  He also would save $842 million in Medi-Cal by moving recipients into managed care plans.

The welfare cut would save money largely by cutting welfare for parents who don't meet work requirements after 24 months, compared to 48 months now.

Should voters approve his tax measure, K-12 schools and community colleges would receive $4.8 billion more than they do in the current fiscal year, for a total of $52.5 billion in state and local tax revenues.  Those schools are already owed a significant share of that $4.8 billion under existing formulas and past promises made by state leaders.

Should the measure fail, the state would cut that funding. Instead, schools would be allotted the same amount they receive in the current fiscal year, though districts may have to borrow more money to keep their programs intact, an option many may find difficult.

If the initiative fails, the state would also cut $200 million each to the University of California and California State University systems, which have relied on large tuition hikes in recent years to offset state budget cuts.  Even if the initiative is successful, CSU would get no increase in state funding this year; UC would receive $90 million toward retirement costs.

Brown’s big ask to the Legislature is to enact his social service cuts by March, but Democratic leaders have already dismissed his call for early action.  Last Spring, state tax revenues outpaced expectations enough for Brown and lawmakers to assume nearly $12 billion more than the Governor anticipated last January.  Democrats do not want to make cuts now, only to find out that tax revenues come in higher again this Spring.

"I do not see us taking cut action between now and the May (budget revision)," stated Senate President Pro Tem Darrell Steinberg, D-Sacramento.  "We've done enough damage on the cuts side.  And the cash situation is pretty good. And it isn't like February of 2009 when we were close to heading over the cliff.  I just don't see the need to make early cuts."

Stay tuned…