Thursday, April 24, 2014
YOLO COUNTY NEWS
99 CENTS

California budget surges to record high

By
From page A2 | January 10, 2014 | 4 Comments

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

The Associated Press

LEAVE A COMMENT

Discussion | 4 comments

The Davis Enterprise does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Greg JohnsonJanuary 10, 2014 - 11:38 am

    For every extra dollar in revenue they get, the politicians will spend three. No amount of taxation can solve our problems, and the state will eventually sink itself!

    Reply | Report abusive comment
  • January 10, 2014 - 11:48 am

    So now that are schools could get retstored state funding from the new budget as much as $2000 or more per student for 2014 and 2015 do we still have to pay the school parcel taxes or will the DJUSD take another look at that. Us homeowners could sure use some extra funds to pay for the new upcoming city taxes and water rates.

    Reply | Report abusive comment
  • ontJanuary 10, 2014 - 7:54 pm

    Great news. The GOP's self-marginalization puts them on the sidelines and coincidentally the fiscal picture brightens considerably. Next up the republican obstructionists in Washington.

    Reply | Report abusive comment
  • greg johnsonJanuary 11, 2014 - 5:48 pm

    California will never win by biting the hand that feeds them. The state will fail because of foolish ideology, and it is a great shame.

    Reply | Report abusive comment
.

News

Will city move forward on public power review?

By Dave Ryan | From Page: A1

 
 
4-H members get ready for Spring Show

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

 
Obama to Russia: More sanctions are ‘teed up’

By The Associated Press | From Page: A2, 3 Comments

 
2 pursuits, 2 arrests keep Woodland officers busy

By Lauren Keene | From Page: A2

 
 
Conference puts focus on Arab studies

By Enterprise staff | From Page: A4

 
Youth sports in focus on radio program

By Enterprise staff | From Page: A4

Rummage sale will benefit preschool

By Enterprise staff | From Page: A4

 
Concert benefits South Korea exchange

By Enterprise staff | From Page: A4

Davis honors ‘green’ citizens

By Enterprise staff | From Page: A5

 
Water rate assistance bill advances

By Enterprise staff | From Page: A5

Program explores STEM careers for girls

By Enterprise staff | From Page: A5, 4 Comments

 
Embroiderers plan a hands-on project

By Enterprise staff | From Page: A5

Central Park Gardens to host Volunteer Orientation Day

By Enterprise staff | From Page: A5 | Gallery

 
Volkssporting Club plans North Davis walks

By Enterprise staff | From Page: A5

Hotel/conference center info meeting set

By Enterprise staff | From Page: A5

 
MOMS Club plans open house

By Enterprise staff | From Page: A7

 
Cycle de Mayo benefits Center for Families

By Anne Ternus-Bellamy | From Page: A8

Author to read ‘The Cat Who Chose to Dream’

By Anne Ternus-Bellamy | From Page: A12

 
.

Forum

Things are turning sour

By Special to The Enterprise | From Page: B5

 
Tom Meyer cartoon

By Debbie Davis | From Page: A6

The high cost of employment

By Letters to the Editor | From Page: A6, 1 Comment

 
High-five to Union Bank

By Letters to the Editor | From Page: A6

Broken sprinklers waste water

By Letters to the Editor | From Page: A6

 
Three more administrators?

By Letters to the Editor | From Page: A6

Neustadt has experience for the job

By Letters to the Editor | From Page: A6

 
Here’s a plan to save big on employee costs

By Special to The Enterprise | From Page: A6, 4 Comments

Davis is fair, thoughtful

By Letters to the Editor | From Page: A6

 
Ortiz is the right choice for Yolo

By Letters to the Editor | From Page: A6

.

Sports

DHS tracksters sweep another DVC meet

By Enterprise staff | From Page: B1 | Gallery

 
Another DVC blowout for DHS girls soccer

By Evan Ream | From Page: B1, 2 Comments | Gallery

Young reinvents his game to help Aggies improve on the diamond

By Bruce Gallaudet | From Page: B1 | Gallery

 
DHS boys shuffle the deck to beat Cards

By Thomas Oide | From Page: B1 | Gallery

DHS/Franklin II is a close loss for Devil softballers

By Enterprise staff | From Page: B1

 
Baseball roundup: Giants slam Rockies in the 11th

By The Associated Press | From Page: B2

 
UCD roundup: Aggies lose a softball game at Pacific

By Enterprise staff | From Page: B3

Jahn jumps to Sacramento Republic FC

By Evan Ream | From Page: B8

 
.

Features

.

Arts

 
Bach Soloists wrap up season on April 28

By Jeff Hudson | From Page: A11

Congressional art competition open to high school students

By Enterprise staff | From Page: A11

 
Emerson, Da Vinci to present ‘Once Upon a Mattress’

By Enterprise staff | From Page: A11

 
Winters Plein Air Festival begins Friday

By Enterprise staff | From Page: A11

 
.

Business

.

Obituaries

.

Comics

Comics: Thursday, April 24, 2014

By Creator | From Page: B6