Tags: brown | cuts | california | budget

Brown Calls for $8.3 B Cuts to Fill $15.7 B Deficit

Monday, 14 May 2012 02:04 PM

 

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California Gov. Jerry Brown proposed more than $8 billion in cuts Monday to close a widening state budget deficit that he blamed partly on a slower-than-expected economic recovery.

In addition to making cuts to a wide array of state services, Brown wants state workers to take a 5 percent pay cut, which would save $402 million in the coming fiscal year. The amount equals less than one-half of 1 percent of the state's general fund.

Brown also used the announcement of his revised budget plan to make another pitch for his tax-hike initiative that he said would send more money to public schools if voters approve it in November.

"I said at the beginning when I ran for this job that it has taken a long time, more than a decade, to get into this mess. We're not going to get out of it in a year — or even two years. But we're getting there. We're making real progress," Brown told reporters in releasing his updated budget.

The revised $15.7 billion budget shortfall for the fiscal year that starts July 1 is roughly 17% of California's $91 billion general fund, the state's main checkbook for paying day-to-day operations. The deficit is far higher than the $9.2 billion gap Brown anticipated in January.

Brown said the sagging economic recovery and court judgments that prevented him from making cuts to programs such as MediCal and In-Home Supportive Services led to the widening budget gap.

The anticipated deficit for the coming fiscal year marks a continuation of budget problems in the nation's most populous state, where the unemployment rate and home foreclosures are among the worst in the country.

The Legislature had cut tens of billions of dollars from schools, social services, higher education, courts and health care programs for the poor since the recession began in late 2007.

The higher education cuts in particular have sparked demonstrations at regents' meetings and on college campuses throughout the state.

The Democratic governor said the size of the deficit makes it virtually impossible to balance the budget with spending cuts alone, so his budget balances the cuts with the revenue he anticipates if voters approve his proposal to increase the statewide sales tax by a quarter cent and boost income taxes on those who make more than $250,000 a year. Both tax increases would be temporary.

Brown's budget proposes $8.3 billion in cuts, $5.9 billion from the tax increases and $2.5 billion in a variety of other solutions.

If voters reject his tax initiative, Brown is proposing an automatic cut of $5.5 billion to K-12 schools and $250 million each to the California State University and University of California systems.

By comparison, public schools would see a 16 percent increase in funding if voters pass Brown's initiative.

Brown called his latest budget plan "modest, fair and temporary." The income tax hikes on the wealthy would be in effect for seven years, while the quarter-cent sales tax hike would remain for four years if voters approve.

In exchange, the governor is proposing a balanced approach that incorporates a wide range of cuts, from prison spending to child care for mothers trying to get off welfare.

His plan to send lower-level offenders to county jails instead of state prison will save $1 billion in prison spending in the coming year, while his tax initiative would constitutionally guarantee that some of the new revenue flows to counties to help them pay for that realignment.

Courts would be cut by $300 million, and another $240 million would be saved by delaying courthouse construction projects.

Brown said his administration will work with state employee unions to achieve the 5 percent savings, either through a straight pay cut or reduced work hours. He issued a detailed plan for public employee pension reform earlier this year, but his proposal has not gained much traction in the Legislature, which is controlled by Democrats.

 


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