Calif. Budget Plan Boosts Spending but Democrats Seek More

91698621SACRAMENTO (AP) – On its face, Gov. Jerry Brown’s proposed $122.6 billion California budget plan would seem to please Democratic interests by pumping billions of new dollars into public schools, health care for the poor and public infrastructure, even as it bolsters the state’s rainy day fund.

Brown touted his income tax credit for the poor, a cost-of-living increase for the elderly, blind and disabled and more funding for universities and colleges when he laid out his general fund plan Thursday. He also urged fiscal prudence, calling for the state to put $2 billion more than legally required into its rainy day fund, bringing it to $8 billion by the end of fiscal 2016.

“You’ve got to plan for the down and level that out,” Brown said at a news conference, pointing to a chart showing the state’s boom-and-bust revenue history. “That’s what I’m trying to do in the budget.”

The Democratic governor’s general fund proposal marks the first step in a months-long dance with fellow Democrats over how much of the state’s surging tax windfall should be devoted to social welfare programs.

Democratic legislative leaders complained that Brown did not spend enough on early childcare programs, did not expand grants to families on welfare, didn’t devote more money to affordable housing and appeared resistant to further increases to the minimum wage.

“California has turned the corner. But not every Californian is feeling it,” said Assembly Speaker Toni Atkins, D-San Diego. She said there remains “a laundry list of critical needs.”

Special funds and bond money will push overall state spending to $170.7 billion, but the Legislature and governor only are responsible for allocating money from the general fund.

Brown’s proposal includes a $1.1 billion compromise on a new tax on health insurers to replace one expiring in June. Brown said the tax is critical to maintaining the state health care program for the poor, Medi-Cal, which is projected to cover 13.5 million people by 2017, nearly a third of the state’s population. Republicans whose votes are needed signaled opposition.

The budget would keep tuition flat for another year at University of California and California State University schools, while a voter-approved minimum funding guarantee will send funding for public schools and community colleges soaring along with state tax revenues.

Per-pupil spending would increase to $10,591 under Brown’s plan, a $368 per-pupil increase over 2015-16. Brown also wants to direct money from other sources to compensate public schools for earlier lean years, which would increase spending to $14,500 per student in 2016-17.

The substantial investments proposed by Brown’s administration underscore the state’s soaring economic recovery. The state faced a $26 billion budget deficit when Brown took office in 2011, forcing deep cuts to social welfare programs, schools and universities.

But revenues are highly reliant on volatile capital gains revenues from the wealthy, and Brown warned again of the inevitable boom-and-bust cycle, proposing to end the fiscal year with an $8 billion rainy day fund.

Because of the volatility, Republicans cautioned against expanding social welfare programs that will require long-term funding. Assembly Minority Leader Chad Mayes, R-Yucca Valley, said the state must not spend money “as if it will reappear every year.”

“Democrats should pay attention to the legislative analyst and Governor Brown’s warnings about overspending, and balance the need to invest in critical infrastructure projects to improve our roads, schools and dams with one-time money,” Mayes said in a statement.

Brown acknowledged there is not money for everything on lawmakers’ wish lists.

“It’s not a candy store where you can pick out whatever you want,” he said.

Advocates also have been pushing the state to raise reimbursement for doctors who provide care in the Medi-Cal program, which was cut by 10 percent during the recession. Brown did not propose an increase Thursday.

The governor called special sessions last year to address the health care tax and a $59 billion backlog in transportation infrastructure spending, but neither gained traction. He said Thursday that he’ll get more engaged in negotiating with lawmakers on both issues this year.

Brown’s transportation plan would spend $3.6 billion a year on infrastructure improvements, funded through a combination of vehicle registration fees, increases to the diesel and gas taxes, and diverting money from the fees charged to polluters.

Republicans have rejected tax increases, arguing there is enough funding elsewhere.

———

By DON THOMPSON AND JULIET WILLIAMS

ASSOCIATED PRESS

Associated Press writers Janie Har and Lisa Leff in San Francisco, Justin Pritchard in Los Angeles and Scott Smith in Fresno contributed to this report.