Gov. Jerry Brown announced his 2011-12 state budget proposal on Monday. This revised version of his January budget plan would increase taxes by $9.3 billion, with a $2.6 billion cut in spending. Brown’s previous plan reduced spending by $12.5 billion and contained $12 billion in tax extensions.
California has accrued $35 billion in budgetary debt and the revision lays out a plan to pay off at least $29 billion of this debt by 2015.
“California’s economy is growing, but we still face a $10 billion structural deficit and a wall of debt for years to come,” Brown said. “California’s finances were plunged into turmoil by the “Great Recession” and a decade of short-term fixes and fiscal gimmicks. This is not the time to delay or evade. This is the time to put our finances in order.”
His revision cuts spending by $11.2 billion to provide a $3 billion increase in funds for public schools starting this year.
With his plan, K-12 and community colleges’ general fund will receive a total of $1.6 billion because of Proposition 98 money being reinstated.
The California State University and University of California (UC) systems are both set to lose $500 million, in addition to the $500 million that was cut from the systems in March.
UC President Mark Yudof said UC has been preparing for the cuts through cutbacks and other measures.
“A cut of this magnitude would be unconscionable – to the university, its students and families, and to the state that it has served for nearly a century and a half,” Yudof said in a statement. “Doubling the cut would reduce the state’s contribution to the university’s core funds – monies that pay professors and staff members, light the libraries, maintain the campuses, and all the rest – to roughly $2 billion.”
“What this reduction most likely would mean is the need to yet again raise tuition,” he said. “An all-cuts budget, as described by the governor, would represent a dire challenge to the university and a retreat by the state from its historic support of higher public education in California.”
For the tax extensions to reach a ballot for California voters, they first must be approved by all Democrats and two Republicans, in both the Assembly and the state Senate.
State Republicans released their own budget last week that relies on the higher April revenue to prevent cuts to education and law enforcement, without raising taxes. Their plan would cut state workers’ pay by 10 percent to provide the government with $1.1 billion in savings.
Republicans said Brown’s budget is a step in the right direction, but contains half-measures.
“If reductions in spending are necessary, why is he increasing spending five percent?” said California Republican Party Chairman Tom Del Beccaro, in a statement. “He claims concern about a “wall of debt” but makes no mention of massive unfunded pension liabilities which threaten education beyond repair.”
“The bottom line is that Brown’s demand to increase spending while we have a deficit means that he still doesn’t understand that we can no longer spend beyond our means,” Del Beccaro said.
Senator Lois Wolk (D-Davis), chair of the Senate’s Governance and Finance Committee, was in support of the revised budget.
“I applaud the Governor for keeping his promise to deliver an honest budget that reduces our structural deficit and reverses 10 years of increased debt,” Wolk said.
“I also was pleased to see him ready to make the necessary reforms in our budget process and pensions system that members from both parties are asking be part of the budget solution. It’s now time for all parties to get serious and focus on moving our state forward together.”
ANGELA SWARTZ can be reached email@example.com.