Governor Jerry Brown proposes $131.7 billion state budget

Gov. Jerry Brown released his final annual budget proposal on Wednesday, proposing $131.7 in expenditures, up about $6 million over last year’s expenses.

His proposal would fill the state’s rainy day fund, which socks away funding for a possible future economic downturn, increase funding for a program supporting low-income students, and increase health care coverage under the Affordable Care Act.

The budget blueprint — the starting point for five months of negotiations with the state legislature — comes as the state is on track to end the 2018-19 fiscal year with one of the largest surpluses in the last decade.

But Brown characteristically urged caution, pointing out that previous recoveries from economic downturns haven’t lasted.

“We must remain vigilant and not let rosy statistics lull us into believing that economic downturns are a relic of the past,” Brown wrote in a message to legislators. The proposal would allocate $3.5 billion to bring the state emergency fund to $13.5 billion.

The budget also proposes a $570 million increase for community colleges, including the creation of the first online-only community college in the state, and three percent funding increases each for the University of California and California State University as long as they hold the line on tuition.

It comes as the state continues to face financial questions about the impact of the Trump administration, including the federal tax bill that some experts believe will hurt the Golden State’s economy.

State legislators have proposed a plan that would let California taxpayers pay their state taxes to a special fund that could be counted as a charity, in order to get around the tax bill’s elimination of federal deductions for state and local tax payments.

Brown voiced interest in that proposal Wednesday, saying “I’m certainly open to it.” He said the legislature should determine whether the Internal Revenue Service could issue a regulation to completely subvert the fund.

The legislative analyst’s office said in November that the state was on track to end the 2018-19 fiscal year with $19.3 billion in total reserves.

“California has faced ten recessions since World War II and we must prepare for the eleventh,” Brown wrote. “Yes, we have had some very good years and program spending has steadily increased. Let’s not blow it now.”

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Source:: The Mercury News – Latest News


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