Democrats, Advocates Eye California’s Booming Revenues

Gov. Jerry Brown’s proposed $122.6 billion California budget plan would seem to please Democratic interests by pumping billions of tax dollars generated by the booming state economy into public schools and universities, health care for the poor and public infrastructure.

Instead, Democratic legislative leaders and advocacy groups saw what was left out.

“A laundry list of critical needs” remains, said Assembly Speaker Toni Atkins, D-San Diego.

For state lawmakers from both parties and the groups that lobby them, the general fund spending the Democratic governor outlined Thursday is merely a starting point in a months-long tug-of-war over funding.

Sen. Holly Mitchell, D-Los Angeles, was upset the plan did not increase maximum payouts to families in the welfare-to-work program, which she called “impossibly tiny.”

Chris Hoene, executive director of the California Budget & Policy Center, which advocates for low-income families, said Brown’s budget is a “missed opportunity to use the state’s strong revenues to boost key public investments that help individuals and families advance, such as child care and preschool, welfare-to-work services, affordable housing, and higher education.”

Union leaders also blasted the plan in an email with a subject line of “Caregivers, Seniors, and People With Disabilities Deserve Better.”

Shamus Roller, executive director of Housing California, a group that backs affordable housing, said, “Governor Brown proposed a budget that provides no new help for the many people struggling to stay in their homes.”

And the Children’s Defense Fund-California accused the governor of “using the threat of future recession to justify not making critical investments of our most vulnerable children today.”

Under Brown’s proposal for 2016-17, California’s general fund would climb to a record high. Combined with special funds and bond money, overall spending would climb to $170.7 billion — a staggering figure bolstered by California’s capital gains windfall as Silicon Valley booms.

But Brown warned that the economic boom will not last.

The state faced a $26 billion budget deficit when Brown took office in 2011, forcing deep cuts to social welfare programs, schools and universities.

At his budget briefing Thursday, he held up charts, one saying balanced budgets have been quickly followed by huge deficits and another that “more permanent spending combined with recession would be devastating.”

“Everybody thinks when they’re up here, it’s all wonderful,” he said, pointing to a soaring revenue peak. “That’s what they thought before the dot-com (bust), and that’s what they thought before the mortgage meltdown.”

Brown called for the state to put $3.5 billion into its voter-approved rainy day fund — $2 billion more than the law requires.

Brown also touted his income tax credit for the poor, a cost-of-living increase for elderly, blind and disabled people who receive supplemental income from the state, and more funding for universities and colleges but said the state can’t meet every demand.

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

His proposal also includes a $1.1 billion compromise on a new tax on health insurers to ensure continued federal funding for Medi-Cal, which Republicans said was unnecessary thanks to the burgeoning tax revenues.

Medi-Cal is projected to cover 13.5 million people by 2017, nearly a third of the state’s population. Supporters were disappointed the governor once again opted not to raise reimbursement for providers in the program, which were cut by 10 percent during the recession, leading to a shortage of doctors in the program.

Additional funding for the University of California and California State University systems in Brown’s budget plan would keep tuition flat for another year, while K-12 schools and community colleges see the largest share of revenues by far: $71 billion, which would push per-pupil spending to $10,591.

The California Chamber of Commerce, which has often found an ally in the Brown administration, thanked Brown for leadership and vision.

“We are pleased that the governor underscored his commitment to long-term budget stability and protecting the state’s solvency,” president Allan Zaremberg said in a statement. “His call for budget restraint should comfort Californians from the threat of new taxes.”

Still, Republicans have ideas as well for the budget surplus.

“The backbone of California’s economic engine, agriculture and reliable energy, is suffering,” Senate Minority Leader Jean Fuller, R-Bakersfield, said in a statement. “Furthermore, we can’t take our roads and water delivery system for granted and must address these fundamental needs that are in distress.”

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