Jerry Brown says state faces first budget deficit since 2012 – a $2 billion deficit
Why is it always a revenue shortfall and never a spending problem? That’s a rhetorical question, of course.
In unveiling a $122.5 billion general fund budget proposal for the 2017-18 fiscal year, Brown said the projected deficit can be eliminated and he proposed moves that might make the Democrat-controlled Legislature cringe.
Among them are:
- Spending $2 billion more on public schools and community colleges in 2017-18 instead of $3.8 billion more by adjusting the Proposition 98 formula that guarantees funding. K-14 would receive $73.5 billion in the next fiscal year under the proposed budget.
- Eliminating last year’s one-time allocation of $400 million for affordable housing that was never spent.
- Eliminating last year’s one-time allocation of $300 million for state building modernization that was never spent
- Pausing rate increases for child care and freezing Middle Class scholarships so that no new students receive them. Also freezing state spending, including money that implements new legislation.
“We are in very uncertain times,” Brown said. “We are subject to a lot of unpredictability … I think it is time for precaution.”
Budget negotiations in recent years have been characterized by Brown’s insistence that the state be cautious in its spending, with his January proposal providing a starting point for six months of negotiations with Democrats who have in previous years urged more spending on social programs.
This is the first time since 2012-2013 that the governor’s budget projected a deficit. The governor cited lower than expected revenue, which fell short of estimates in five of the past seven months. Despite that, revenues are up 3 percent overall.
Last year, Brown and legislative leaders reached a budget deal days before the June 15 deadline for the state Legislature to pass the annual spending plan. With that deal in place, Brown uncharacteristically did not use his authority to change the budget passed by the Legislature
The current budget totals $122 billion and bolsters the $6.7 billion rainy day fund. The current budget also sends $71.9 billion to K-12 schools and community colleges, the highest amount sent to schools under the state’s minimum funding guarantee. That brought the per student spending in K-12 schools to $10,643, which is up $3,600 since 2011-12.
Under the budget proposal for the fiscal year that begins July 1, Brown wants to expand the rainy day fund by another $1 billion.
State lawmakers have emphasized the need to address the state’s woefully dated roads and bridges. In his budget, the governor pushed the same transportation package he introduced in 2015, which provides $4.2 billion each year to address the state’s highway system, much of which was built between the 1950s and early 1970s.
Brown’s transportation plan includes a new $65 highway user fee paid by California drivers plus higher taxes at the gas pump.
Population increases in recent decades along with more trucks on the roadways due to increased international trade moving goods from the state’s ports has placed additional pressure on the aging highways. At the same time, fuel-efficient cars have become more popular, leading to a decrease in the amount of the taxes collected at the pump to pay for the transportation infrastructure.