Friday, December 19, 2014
YOLO COUNTY NEWS
99 CENTS

California budget surges to record high

By
From page A2 | January 10, 2014 |

SACRAMENTO  (AP) — A robust economic recovery and surging revenue propelled by voter-approved tax increases have sent California’s general fund spending to a record high, marking a dramatic turn-around from the state’s days as the nation’s poster child of fiscal dysfunction.

Yet Gov. Jerry Brown, in releasing his budget proposal Thursday, pledged to take a somber approach in spending the windfall. He said California must begin paying down what he has called its massive “wall of debt,” a stew of unfunded liabilities, bond debt and borrowing that is estimated at $355 billion.

His somewhat cautious approach will run afoul of some of his fellow Democrats in the Legislature, many of whom already are clamoring for higher spending on pet programs.

“When you’re at this level of long-term liability, it isn’t time to just embark on a raft of new initiatives,” Brown said in announcing details of his budget during a Capitol news conference.

Sate Sen. Lois Wolk, D-Davis, praised his caution. “This is a budget for a recovering economy,” she said. “The governor’s budget pays off more than $11 billion in debt and builds the state’s reserve.”

Assemblywoman Mariko Yamada, D-Davis, had a more mixed response.”I applaud the continued restraint and responsibility,” she said while also bemoaning “the blanket prohibition on federally authorized overtime for In Home Supportive Services.”

The news conference was moved up a day after copies of his budget proposal were leaked to media outlets late Wednesday. He was scheduled to promote his budget plan later Thursday in San Diego and Los Angeles.

The governor’s budget proposal for the 2014-15 fiscal year dedicates $11 billion to paying down debts and liabilities, including $6 billion in payments that had been deferred to schools and nearly $4 billion to pay down the so-called economic recovery bonds left over from the administration of Gov. Arnold Schwarzenegger.

It does not address long-term liabilities in the state’s teacher retirement fund, which will require billions of dollars extra a year to make solvent. Instead, Brown said he wants to create a plan for long-term solvency this year. The teachers’ pension fund is estimated to be $80 billion in the red.

The record $106.8 billion general fund exceeds the spending level of just before the recession by more than $3 billion and is a nearly 9 percent increase over spending in the current fiscal year.

The governor also sets aside $1.6 billion for a rainy day fund to protect against future downturns, saying “wisdom and prudence should be the order of the day.”

California’s financial turnaround is due in large part to temporary increases in the state sales tax and income taxes for the wealthy that were approved by voters in 2012. Combined, those tax increases are expected to generate about $6 billion a year.

The state also has been adding jobs at one of the fastest rates in the nation since the recovery from the recession began, led by the technology sector.

The state’s legislative analyst forecasts that California will have a $3.2 billion operating surplus by the end of the fiscal year, one that is expected to approach $10 billion within three years.

Brown has warned against spending all the surplus on new programs or to restore services cut during the recession, saying the state needs to prepare for future recessions and get control of its debts.

“Now some people would say, because we have this little black mark there, that we should go on a spending binge,” he said, pointing to a chart showing this year’s surplus. “I don’t agree with that. We see the lessons in history.”

That approach appeals to minority Republicans, who generally praised the budget while warning against spending pressure from Democratic lawmakers in the months ahead.

“I like where it’s at,” said Assembly Minority Leader Connie Conway, R-Tulare. “My fear is that it’s not going to stay as constrained as it is right now.”

The governor’s cautionary approach is caused in part by the source of the state’s revenue. His budget assumes about $4 billion in capital gains tax revenue, driven largely by the soaring stock market. But it also acknowledges that such income is highly volatile and will be short-lived.

Brown’s tax increases under Proposition 30 will begin expiring in a few years: The state sales tax hike will last four years and the higher income taxes on those making more than $250,000 a year will last seven years.

Yet pressure for more spending already is coming from Democrats who control the Legislature.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, has said at least one-third of the surplus should go to restoring programs that experienced spending cuts, and he is advocating a new statewide program that would provide pre-kindergarten for all 4-year-olds.

Sen. Noreen Evans, D-Santa Rosa, urged restored funding for welfare and other programs that affect women and children.

The Legislature will debate Brown’s proposal in the coming months and faces a June 15 deadline to pass its own spending plan.

Despite Brown’s call for budgetary prudence, the 8.5 percent increase in general fund spending over the current fiscal year includes additional money for nearly every area of state government. That includes $45.2 billion for K-12 schools, an increase of nearly $4 billion from the current fiscal year.

The University of California, California State University and community college systems will receive a total of $1.1 billion. About half the money would go to community colleges, which are expected to grow rapidly in the next few years.

In its budget document, the administration said the extra higher education spending should be accompanied by reforms that improve student success and make the institutions more efficient.

The budget also proposes $815 million for critical deferred maintenance in state parks, highways, schools, courts and other state facilities, and $619 million to expand water storage capacity, improve drinking water supplies and increase flood protection.

One of the Republicans who will challenge Brown this year if he decides to seek re-election said Brown’s budget proposes too much spending, saves too little in reserves and does not do enough to create tax incentives that will keep businesses in California.

“We’re seeing people literally get a U-haul and leave California, and he’s spending money like it’s 1999,” said Assembly Tim Donnelly, who lives in the San Bernardino Mountain community of Twin Peaks.

————

By Juliet Williams

Comments

comments

The Associated Press

.

News

 
UCD, UC team up to study effects of climate change

By Special to The Enterprise | From Page: A1 | Gallery

Teens’ goal? Helping other soccer players around the world

By Anne Ternus-Bellamy | From Page: A1 | Gallery

 
There’s a plate for you at the Davis Holiday Meal

By Dave Ryan | From Page: A1 | Gallery

Police seek suspect in hit-and-run collision

By Lauren Keene | From Page: A2

 
Help sought in search for runaway Davis teen

By Lauren Keene | From Page: A2

Feds release ‘framework’ to rate colleges

By The Associated Press | From Page: A2

 
Gunfire leads to DUI arrest

By Lauren Keene | From Page: A2

 
Creative women share food, friendship

By Enterprise staff | From Page: A3

Konditorei presents free holiday concert

By Enterprise staff | From Page: A3

 
Welcome 2015 with Mumbo Gumbo at a gala bash

By Enterprise staff | From Page: A3

 
Luminaria display planned in West Davis

By Enterprise staff | From Page: A3

Sierra Club calendars on sale Saturday

By Enterprise staff | From Page: A3

 
Willett bench is a labor of love

By Jeff Hudson | From Page: A4

Author! Author! UCD hosts talks, Q and A on Asia-focused books

By Special to The Enterprise | From Page: A4

 
Blue Christmas service planned at Davis churches

By Enterprise staff | From Page: A4

Libraries will be closed around the holidays

By Enterprise staff | From Page: A5

 
See diving ducks at city wetlands tour

By Special to The Enterprise | From Page: A5 | Gallery

 
Downtown gift cards get a new perk

By Enterprise staff | From Page: A6

Meditation, Buddhism classes offered

By Enterprise staff | From Page: A7

 
A home for the holidays?

By Enterprise staff | From Page: A8 | Gallery

Nobel Prize winner will discuss research related to autism

By Special to The Enterprise | From Page: A8

 
Traditional carols service is Saturday at St. Martin’s

By Enterprise staff | From Page: A9

Explorit: Experience nano this spring

By Lisa Justice | From Page: A9 | Gallery

 
Supplies collected for victims of abuse

By Enterprise staff | From Page: A11

Grandmothers support group meets weekly

By Enterprise staff | From Page: A11, 1 Comment

 
Soup’s On will benefit NAMI-Yolo

By Enterprise staff | From Page: A11

Donate to STEAC at Original Steve’s

By Enterprise staff | From Page: A11

 
.

Forum

He needs them to pay up

By Creators Syndicate | From Page: B5

 
Kudos to Central Park Gardens donors and volunteers

By Letters to the Editor | From Page: A14

Tom Meyer cartoon

By Debbie Davis | From Page: A14

 
Cheers and Jeers: Have you ever seen the rain?

By Our View | From Page: A14

Defeating Ebola involves medicine, and prayers

By Special to The Enterprise | From Page: A14 | Gallery

 
.

Sports

Cousins is back in lineup but Kings fall

By The Associated Press | From Page: B1 | Gallery

 
Devil boys hold off scrappy Rio Linda

By Bruce Gallaudet | From Page: B1 | Gallery

Lady Blue Devils rout an undefeated Liberty squad

By Enterprise staff | From Page: B1

 
UCD RB coach Wright heads to Florida; what next?

By Bruce Gallaudet | From Page: B1

Aggies nab junior college defensive lineman

By Enterprise staff | From Page: B1

 
Nostra-Dunning makes his college bowl picks

By Bob Dunning | From Page: B2

Tennyson’s first goal is the difference in Sharks win

By The Associated Press | From Page: B6 | Gallery

 
.

Features

Name droppers: Trio elected to academy of inventors

By Enterprise staff | From Page: A11

 
.

Arts

 
‘Before Midnight’ screening is tonight

By Enterprise staff | From Page: A15

DMTC plans New Year’s Eve party

By Enterprise staff | From Page: A15

 
Tom Rigney and Flambeau to play

By Enterprise staff | From Page: A15

 
DMTC announces auditions for ‘Sweeney Todd’

By Enterprise staff | From Page: A15

 
.

Business

After 19 years, Alfa Romeo returns

By Ann M. Job | From Page: A16

 
.

Obituaries

Rena Sylvia Smilkstein

By Special to The Enterprise | From Page: A6

 
.

Comics