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Brown Faces California Budget Fight As Surplus Grows

California Gov. Jerry Brown listens to a question concerning his proposed 201...

Credit: Associated Press

Above: California Gov. Jerry Brown listens to a question concerning his proposed 2018-19 state budget at a news conference Wednesday, Jan. 10, 2018, in Sacramento, Calif.

Brown Faces California Budget Fight As Surplus Grows

GUEST:

Ben Adler, capitol bureau chief, Capital Public Radio

Transcript

California Gov. Jerry Brown faces a bruising fight with the Legislature over funding for welfare, health care and higher education after producing a revised budget proposal that shows a lot more money but not a lot more spending.

The state's budget surplus has ballooned to nearly $9 billion, the largest in at least 18 years, at a time when California is facing serious challenges like rising homelessness and growing inequality.

But in releasing his spending plan Friday Brown stuck to a familiar refrain: The good times are nearing their end and new spending would be irresponsible.

"It can get giddy at the peak," he said. "Don't fall over."

Brown's caution has frustrated fellow Democratic lawmakers who are eager to tap into the windfall driven by a strong economy and higher wages, particularly for wealthier taxpayers, to help people struggling with California's high costs.

"In these times of prosperity, we need to make sure we bring all Californians along for the ride," said Democratic Assemblyman Phil Ting of San Francisco, the Assembly's budget chief.

RELATED: California Governor To Release Budget Amid Growing Revenue

Senate President Pro Tem Toni Atkins, a San Diego Democrat, said there's a framework to build for the future but "we also have to lift up the families that are struggling now."

Brown's $137.6 billion revised general fund budget was up nearly $6 billion from his earlier proposal in January. He wants to save most of the surplus to protect spending during a future recession, boosting the rainy day fund to nearly $14 billion.

With the most robust revenue projections California has seen in years Brown is likely to face even more pressure from Democrats to boost spending.

Those include extending health coverage to people who are uninsured, including those living in the country illegally, and reducing premiums for people who buy their own health plan. They want to increase monthly payments for recipients of CalWorks, the state welfare program, and extend access to child care for low-income parents.

The University of California and California State University systems are seeking increases they say is needed mitigate tuition hikes. Fire officials have asked for $100 million for overtime, equipment and dispatchers to better prepare for potential fires during risky weather conditions.

Republicans generally supported Brown's fiscal prudence and urged him to hold the line.

Republican Assemblywoman Melissa Melendez of Lake Elsinore said it's "the stuff of fiction" to say California has a budget surplus "when the state is staring down more than $200 billion in outstanding debt and liabilities."

The Assembly budget committee's ranking Republican, Jay Obernolte of Hesperia, said the surplus means there was no need for the state to impose a $52 billion gas tax to pay for transportation projects.

Brown, 80, is finishing his fourth term and will leave office in January as California's longest-serving governor. He's pushed ambitious, long-term infrastructure projects like road maintenance, high-speed rail and two massive water tunnels.

He's largely tapped dedicated revenue sources or created new ones for those projects. But he's been stingier when it comes to the state's general fund. He has generally resisted new ongoing spending on social services that he says can't be sustained.

"All the people who want things won't be getting what they'd like to have," Brown said Friday.

Brown said Democratic spending priorities "have some merit to them, but we're already overextended." He said he was determined to leave the state in good fiscal condition.

The new spending he did propose was concentrated on one-time expenditures. That includes $2 billion for infrastructure at universities, courts, state facilities and flood control levies. He proposed $359 million to help local governments address homelessness — far less than the $1.5 billion sought by a bipartisan group of mayors from the state's 11 largest cities.

He proposed $312 million to help people with mental illness and wants to extend the earned-income tax credit, which helps the working poor. He wants $96 million for a variety of efforts to prevent wildfires, including doubling the amount of land that's actively managed through vegetation thinning, controlled burns and reforestation.

Brown's $137.6 billion spending plan reflects money from the general fund, the state's main bank account. His proposal is $199.3 billion when including bonds and special funds, which are restricted for specific purposes.

The Assembly and Senate have until June 15 to pass a budget under the state Constitution. If they're late, lawmakers' pay will be docked.

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