During his presentation of the 2017-18 revised budget proposal, Gov. Jerry Brown warned Californians lean times were ahead. According to Brown, state residents should prepare for future budget cuts. The May budget revision has adjusted the shortfall from more than $5 billion in January to $3.3 billion.
However, Brown said it was important to keep allocating money for essential areas such as education and healthcare.
"Over the past four years, we have increased spending by billions of dollars for education, health care, child care and other anti-poverty programs. In the coming year, I don't think even more spending will be possible," said Brown. "We have ongoing pressures from Washington and an economic recovery that won't last forever.
Brown’s budget allocates:
An increase in funding for schools. The budget will increase K-12 funding by more than $4,000 per student in the 2017-18 Fiscal Year.
The May revision also restores $500 million in funding to childcare providers.
The budget will also provide $2.8 billion in new funding for highway maintenance and improvements, transportation projects and rail and public transport modernization. This funding is part of the Road Repair and Accountability Act of 2017 (SB 1), which raised taxes on gas sales. The funding package provides $54 billion over the next decade.
The May budget revision also provides a $6 billion supplement payment to CalPERS. This is a loan from the Surplus Investment Fund and is designed to save the state $11 billion over the next two decades.
According to Assemblymember Chris Holden (D-Pasadena,) chair of the California Legislative Black Caucus, many people rely on state assistance programs to attend college.
"I applaud Gov. Brown for restoring the $8 million Cal Grant award for students at private college and universities that was cut in January's budget proposal. Today, African American students make up nearly 6 percent of all Cal Grant awardees in California's private, nonprofit sector of higher education,” said Holden. “The Cal Grant program is very important to both the African American and Latino communities, as well as other low income populations, to help provide opportunities to attend college.”
However, Senate Republicans were not happy with the budget. They accused Brown of being a typical tax and spend Democrat. Senate Republican Leader Patricia Bates (R-Laguna Niguel) was critical of the controversial gas tax and the way it was being used.
“After giving Californians a lemon of a gas and car tax hike, Sacramento Democrats seem intent on giving them a lemon of a budget,” said Bates. “The revised budget takes money from tax increases for programs like education and health care and transfers it to the General Fund for other purposes. Such moves underscore why raising taxes without reform is folly.”
Sen. Jim Nielsen (R-Tehama), vice chair of the Senate Budget and Fiscal Review Committee, accused Brown and Democrats of focusing on expensive projects and not preparing for future lean years.
“The Democrat majority must resist the urge to spend and instead prioritize our most vulnerable populations in anticipation of potential budget shortfalls,” said Nielsen. “It is imperative that we invest in our state savings account – the Rainy Day Fund – for the inevitable economic downturn, as the governor appropriately noted.”
Proposition 2, passed in 2014, requires 10 percent of tax revenues to be deposited in the state Rainy Day Fund. According to the governor’s office, by the end of FY ‘17-18, $8.5 billion will be in the Rainy Day Fund, which is 66 percent of the constitutional target.
Assemblymember Chad Mayes (R-Yucca Valley) was concerned some of the money generated by recent ballot measures, such as Proposition 56, was being diverted to other areas. (Prop 56 raised taxes on cigarettes to fund low-income health care programs, tobacco prevention and early childhood development programs.)
Citing the recent gas tax hike, Mayes said California was becoming too expensive for working families. “We want to make California a place people can afford to live in,” he said.