“If we don’t rein things in, then down the road there will be drastic cuts, just like there were over the last 10 years. It’s either stop and start or steady as you go,” Brown told reporters at a news conference at the state Capitol. “We have a carefully balanced budget, more precarious than I’d like, but it is balanced.”
Brown’s proposal would add $1.2 billion into a rainy day fund expanded by voters in November’s elections. It would pay down an equal amount in state debt. Spending on K-through-12 education would rise sharply, from $47.3 billion in fiscal year 2011-2012 to $65.7 billion today, an increase of roughly $2,600 per student. And Brown proposed $1 billion in new spending on clean technologies and a cap-and-trade system aimed at reducing California’s carbon footprint.
Brown warned of rising health care obligations that, without proper funding, could leave the state hundreds of billions of dollars in the red. Medicaid expansion under the Affordable Care Act has added more than 4 million new low-income residents to California’s program, and Brown said he would begin negotiating with state public employee unions over the amount of money they contribute to their own health-care costs, a significant and rising portion of the budget.
Social services advocates expressed disappointment in Brown’s budget, which they say didn’t go far enough to help low-income residents still struggling to recover from the recession.
“The budget fails to prioritize the nearly nine million Californians struggling to make ends meet every day,” Eddie Kurtz, executive director of the progressive Courage Campaign, said in a statement. “Restoring California’s Health and Human Services budget is critical to growing a robust economy and sparking a virtuous economic cycle that will benefit all Californians, not just the wealthy among us.”
The budget also sets up a showdown between Brown’s administration and the University of California system, which has proposed raising tuition against the governor’s wishes. The budget would add $120 million to the UC system, though only if tuition remains flat. University system President Janet Napolitano said in a statement she was “disappointed” Brown’s proposal doesn’t include enough funding to expand enrollment.
“Public universities require public support. On a per-student basis, the state is paying far less than it did in 1991,” Napolitano said. “UC has cut costs, generated new revenue, bolstered efficiencies and achieved significant savings.”
Republican legislative leaders were cautiously optimistic that Brown’s budget would keep spending down.
“He is paying down debt, he’s putting some money in the rainy day fund, he’s striking the right sounds on what he did talk about, and that’s all good because there’s a lot of pent-up demand to spend more money in the state,” said state Sen. Bob Huff (R), the minority leader. “The Democrat legislative leaders are going to want to ramp up spending, and so he’s got to hold the line on that.”
Brown’s proposal is the first volley in a months-long negotiation with legislative leaders before the budget is formally finalized this summer. State Assembly Speaker Toni Atkins (D) called it a “realistic and practical starting point,” while Senate President Pro Tempore Kevin de Leon (D) said it was “the first step in [Brown’s] discussion with the legislature.”
Brown cautioned against more tax increases, just two years after voters passed a temporary sales tax hike he supported. Several union groups are said to be planning ballot initiatives in 2016 that would raise revenues for pet causes, but Brown said the political appetite for further increases doesn’t exist.
“If you tell people that their Pilates class will be taxed at 8.5 percent, they may not be as yoga-happy as they were before,” he said. He pointed to GOP electoral gains in reliably blue states like Maryland, Illinois and Massachusetts, where Republican governors take office this month.
“The mood is for less interference in the private economy,” Brown said.