Jerry Brown unveils record $132 billion California budget for 2018-19

January 11, 2018 in News by RBN Staff


Source: SFGate | By Melody Gutierrez



SACRAMENTO — Gov. Jerry Brown urged lawmakers to remain vigilant as they debate the record-setting $132 billion general fund budget he proposed Wednesday, saying that there’s an “inevitable recession lurking in our future.”

The January budget proposal kicks off six months of negotiations with the Democratic-led Legislature and will be the final budget under the termed-out governor ahead of the November election.

“This is a prudent budget,” Brown said.

Gov. Jerry Brown presents highlights of his budget proposal in Sacramento, a record spending plan that includes rainy-day funding to hedge against a recession he sees on the horizon. Photo: Paul Chinn, The Chronicle

The plan includes $4.6 billion for transportation projects using newly passed vehicle registration fees and increased gas taxes. That money would repair neighborhood roads, state highways and commuter corridors and upgrade public transit.

Brown wants to put more money into the state’s rainy-day fund than required by law, by adding $5 billion in two payments to bring the total to $13.5 billion.

Most of that money is from a $6.1 billion surplus in tax revenue, which one Republican, Assemblyman Matthew Harper of Huntington Beach (Orange County), said should be returned to taxpayers. Other Republicans praised Brown for increasing the state’s rainy-day fund and called for more to be used to pay down debts.

“It’s good news for Californians that we have such a large budget surplus, but it also graphically illustrates the fact that Californians are over-taxed and it also graphically illustrates the fact that recently enacted tax increases on Californians, such as the gas tax increase that went into effect last November, were completely unnecessary,” said Assemblyman Jay Obernolte, R- Big Bear Lake (San Bernardino County ).

The state, however, estimates that even a moderate recession would drop state revenue by more than $20 billion each year for several years.

“California has a very volatile tax system,” Brown said. “It means that money comes in very generously, very buoyantly, but it goes out the same way. … It’s so important that we prepare for that recession.”

Brown’s proposed budget is nearly $7 billion more than the current fiscal year budget for the general fund, which pays for basic state services such as education, prisons and social service programs. With special funds and bond funds included, the governor’s total spending plan is $190 billion.

The plan includes a new online community college and 4 percentincrease for community colleges overall, which includes $46 million to make the first year of community college free for first-time, full-time students. California State University and the University of California would each receive a 3 percent increase. CSU and UC leaders said that increase was less than they expected.

“This budget proposal could reverse any progress made in the last decade—diminishing student access, success, limiting degree attainment and depriving California’s industries of skilled professionals,” said CSU Chancellor Timothy White in a statement.

The governor’s budget does not address the recently approved federal tax changes, which analysts say could give a temporary economic boost but ultimately hurt millions of California taxpayers by limiting the amount of state and local taxes that can be itemized on federal returns next year. Brown, who opposed the federal tax plan, will include a preliminary analysis of its impact on the state in his revised budget in May.

“It does make our very progressive tax system more burdensome than need be,” Brown said. “And I think that was the point. This was an assault by the Republicans in Congress against California, New York, New Jersey, Maryland, Illinois, and Massachusetts. … It’s really a dumb move on the part of the Republicans, and I hope the next Congress will be Democratic and they reverse that.”

Melody Gutierrez is a San Francisco Chronicle staff writer. Email: Twitter: @MelodyGutierrez