SACRAMENTO — After years of double-digit deficits and billions in budget cuts, California’s fiscal outlook is looking brighter.

Gov. Jerry Brown on Thursday will propose his third budget since reclaiming the governor’s office. It’s expected to be the first time in many years that the nation’s most populous state does not face drastic budget cuts.

The state still must address a $1.9 billion deficit, but that is far from the $25 billion shortfall Brown faced when he started his latest term as governor two years ago. Thanks to tax increases approved by voters in November, California is projected to start running budget surpluses within two fiscal years if Brown can keep the Legislature’s Democratic supermajorities in check and hold down spending.

“You can take this to the bank: We’re not going to spend money that we can’t afford to spend,” Brown said earlier in the week. “We have to do more with less; that’s just the way life is.”

California’s general fund spending hit a high of $103 billion before the recession decimated the state’s economy and severely cut tax revenue for the state and municipalities. It dropped to a low of $87 billion during the 2011-12 fiscal year, requiring lawmakers to make deep cuts in a wide array of state services, including K-12 schools, higher education, the court system, and social services for the needy and disabled.

Many Democratic lawmakers want to use the $6 billion a year in extra tax revenue to rebuild those services. But Brown has said the 2013-14 fiscal year, which begins July 1, will be marked by “fiscal discipline and living within our means.”

He promised last fall during the campaign for his tax initiative that the extra money would go to schools, colleges and universities.

Cuts are still expected in some areas, such as the courts, because lawmakers are required to pass a balanced budget. But after years of debating how much to cut from education and other programs, Brown and California lawmakers can turn their attention to setting spending priorities and revamping some of the state’s funding schemes.

Among Brown’s priorities is creating a new funding formula for schools, which would be aimed at giving school districts more control over spending and directing state money to the neediest children and poorest districts. His proposal is expected to run into opposition from lawmakers representing more affluent regions of the state.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he is open to Brown’s school funding proposal. He said the goal is laudable, but there will be a lot of details to work out.

“How do you make sure, without micromanaging, that the kids that need help the most get the help that they need?” Steinberg said. “How do you make sure that the proven approaches to improving student achievement and helping kids graduate are funded?”

California’s nonpartisan legislative analyst’s office projected last fall that the state’s overall general fund spending would be about $94 billion in the coming fiscal year, nearly 8 percent more than in the current year.
Associated Press