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Brown releases budget proposal

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From page A2 | January 06, 2012 |

SACRAMENTO (AP) — Gov. Jerry Brown made his first campaign pitch in releasing his 2012-13 budget proposal, telling Californians they must choose between paying higher taxes or accepting cuts that would result in three weeks less school, higher college tuition fees and fewer staff to patrol the state’s scenic forests and beaches.

The Democratic governor projected the state’s budget shortfall for the fiscal year starting July 1 at $9.2 billion, much more manageable than the $26.6 billion deficit the Legislature closed for the current year. Despite an improving economy, Brown said he will be forced to cut nearly $5 billion to public education along with additional cuts from courts to public universities if temporary taxes are rejected at the ballot box in November.

“This is not nice stuff but that’s what it takes to balance the budget and that’s assuming we get the tax revenues,” Brown told reporters during a news conference Thursday.

The governor’s office estimates the total general fund budget for the coming year at $92.5 billion, about $7 billion more than the current year. The general fund pays the day-to-day operations of California government and is where the budget has been in deficit.

“The signs of economic recovery are optimistic, but we still face difficult choices,” Assemblywoman Mariko Yamada (D–Davis), said in a press release after Brown’s announcement. “I remain concerned about the deep cuts to safety net programs that support people suffering job loss, disabilities, and poor health.  Over $2 billion in cuts to CalWORKS and Medi-cal programs will only hurt the poorest among us, specifically women, children and the elderly.   An additional $302 million from CalGrant scholarships targets our young people at a time when education costs are soaring.”

To address California’s ongoing shortfall, Brown is trying to gather support for a November ballot initiative that would raise the income tax on those making $250,000 or more a year and boost the state sales tax by a half cent. The higher taxes would raise about $7 billion a year and expire in 2017, a date by which Brown hopes the economy has improved enough to bring a healthy flow of tax revenue back to the state.

Brown said the budget cuts he enacted last year, combined with additional cuts and his call for temporary tax increases in the coming fiscal year will all but end the massive deficits that have defined California’s fiscal planning for years.

“We’ve cut the structural deficit substantially, and we now have the possibility of eliminating over the next couple of years the deficits that have plagued California,” he said.

Brown said Thursday that the list of so-called trigger cuts were not targeted at popular programs to win political support from voters but in an interview with The Associated Press last week, the governor said he wanted to force Californians to make a choice between the programs they like and their desire not to pay higher taxes.

“Here’s the dilemma: People don’t want cuts in education and health care and policing, but they don’t want to pay taxes either. And there’s a type of cognitive dissonance where people want incompatible objectives. So the challenge for today’s politics is to clarify the choices,” Brown said.

Since the recession began in 2007, California has seen tax revenue drop $17 billion, necessitating continued cutbacks to nearly all state services.

Brown acknowledged that he faces a difficult campaign year ahead as he tries to persuade voters to support his plan for temporarily higher taxes. Despite several rounds of cuts since the recession, voters remain ambivalent about taxes and the governor could face competing tax measures.

Brown is working to rally labor, local governments and other interest groups to back his plan. He submitted ballot language late last year and has begun fundraising for the initiative, which will cost millions to finance.

The release of the budget Thursday comes as California enacts $1 billion in so-called trigger cuts across a wide array of state programs, including higher education, busing for K-12 students and services for the disabled. Those midyear cuts were necessary because tax revenue was coming in much lower than Brown and Democratic lawmakers had anticipated when they passed the current budget last summer.

Additionally, about 70 of California’s 278 state parks are scheduled to close starting July 1.

If voters approve his ballot proposal for higher taxes, Brown will address the $9.2 billion deficit in the coming fiscal year with a near equal balance of spending cuts and revenue increases. If they do not, the state would make $4.8 billion in additional cuts to the K-12 system, $200 million each to the University of California and California State University systems, $125 million to courts and $15 million to state forest fire protection.

Even before voters weigh in on the tax initiative, Brown’s budget includes $4.2 billion in cuts to the state’s welfare-to-work program, Medi-Cal and child care services.

“We’re making some very painful reductions,” the governor said. “Mothers and kids are getting the same welfare in real dollars that they got in the ’80s. Same for the blind, elderly and disabled.”

Anthony Wright, executive director of Health Access California, a group that lobbies for health care for the poor, said the governor’s proposal “is another body blow to the health system on which we all rely.”

Democratic lawmakers who control the Legislature said they will wait a few months to see if the economy improves before deciding whether more cuts are necessary. Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he took issue with Brown’s proposed cuts to welfare and social programs for the poor.

Already teachers, students and the needy have been impacted by recent years of cuts and Steinberg said he believes voters will be supportive of Brown’s tax proposal. “Enough of bloodletting,” he said.

Brown, who failed to reach a compromise with Republicans last year, indicated he would once again bypass the minority party and pass the bulk of his spending plan with Democratic support.

Assemblyman Jim Nielsen, vice chair of the Assembly Budget Committee, called the governor’s plan of raising taxes “business as usual” by Democrats. The Republican from Gerber criticized the governor for failing to impose spending restraints, such as a spending cap.

“The last thing we want to do is stomp on California’s recovering economy by raising taxes,” Nielsen said.

————

By Judy Lin. Associated Press writer Juliet Williams contributed to this report.

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