Our top story on KPBS Midday Edition California Governor Jerry Brown gave a mixed bag of messages during his visit -- budget revised news conference today. On the one hand more revenue has come into the state the January projections allowing the governor to restore some proposed spending cuts. But what the governor sees as a looming recession and potential cuts from Washington made him urge caution and fiscal restraint. Over the past four years California has increased spending by billions of dollars for education, healthcare, childcare and other poverty programs. In the coming year I do not think more spending will be possible. Joining me a Scott Shafer senior editor of the government and politics desk at KQED. Welcome to the program. Thank you. Worded this additional revenue come from for the budget proposal. About $3 billion comes from SP1 which was the big transportation bill that was passed by two thirds majority in both branches. That will generate about $1 billion a year but we are already partly through the year so some of that revenue is reflected in the current revised budget. Than the revenues are a little bit stronger than they thought they were going to be in January so they are still down from what projections were a year ago but they are better than they were in January with the original budget came out. That pretty much covers the increase in money that is in the budget. Does that mean the state is in the black instead of the projected $1.6 billion deficit the governor was talking about in January? Not quite. It was as he said a $1.6 billion shortfall it is now about 400 million. It has been cut considerably but the governor is always a glass is half empty kind of guy. He always sees storm clouds and is very reluctant to predict good times ahead. He is always seeing the recession that is just on the horizon. He pointed out today that we have had an unusually long growth. Since the great recession and he is expecting over the next year or two that is going to change. What he said he is trying to avoid is the stop start stop start pattern that we have seen in past years where in Goodyear's the legislature and the governor spend lots of money they may have to cut lots of money when things go south. What are the big spending turnarounds? I would not call them big. There is not that much more additional money but in the January budget he was calling for freezing increases for child care funding. Has now put those increases back and. He also talked about reducing money to counties for in-home healthcare. That is now back in their. It is those kinds of things tweaks here and there which added money for anticipated losses. I call that the Trump effect. The additional lawsuits for healthcare and environment and immigration are the areas that got a little bit more money. He maintains the proposed cuts to the middle class scholarship but he managed to make college -- is there any room for that. The governor and the legislature know that. He puts out his job in the legislature will look at it and some of those discussions and priorities expressed by Democrats are reflected in the revised budget. The tuition scholarships are not here does not mean that it will not be. Part of this is you have to get the legislature something to brag about. You have to give them something to be put back into the budget. It is up to the legislature to make the move with the governor and say we want to change these priorities slightly. That is what it is. It is a give-and-take. As he said the governor spent quite some time and this news conference with pointed warnings about what the state may be facing in the years to come. What else did he say about that? He has been saying this for some time that we are a boom and bust state and we have a lien on about 70% of our budget that comes from personal income tax. It is inevitable that when times turn that when people are making less money has a disproportionate impact on California's budget which was only last on the income tax. Of course he also had a chart that said this could happen with Trump care if the Bill passed by the house last week. Some version of that process by the Senate and the governor signs it. Be a very big impact on, when his budget cuts to Medi-Cal funding. He did not say what the state would do. He said it would be too ugly to even talk about that now. There will just have to fight and make sure the changes do not occur. You there will deal with that. Goes to the. They just need a simple majority. To have a deadline of June 15 but now is prop 54 which the voters passed it has to be in print 72 hours earlier before they vote on it. The clock is ticking that they have to be done by June 15. I've been speaking with Scott Shafer from the California politics and government desk thank you.
California Gov. Jerry Brown on Thursday dialed back his proposed cuts for schools and child care, citing an improved fiscal outlook since he outlined the cuts in January.
He said the economic picture would allow $1.5 billion more in general fund spending in his $124 billion proposal — even amid uncertainty as the Trump administration seeks to overhaul the federal health care law.
"We're trying as much as possible to keep us on an even keel," Brown said in reversing his proposed cuts for K-12 schools. By law, about half the state's spending goes to K-12 education and higher education.
Brown also wants to reverse a proposed $500 million cut for low-income childcare that he sought in January and revise his proposal to shift nearly $600 million in costs to counties. After county officials warned they could not absorb the expenses, the state would now shift $141 million under Brown's proposal.
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The release of Brown's spending plan kicks off a month of negotiations with the Democrat-controlled Legislature. His plan would need the approval of lawmakers.
"Spending has gone up far more than anybody ever imagined," Brown said, citing a tax increase and improving economy. Yet he warned again that the economy could tank, taking the state's budget with it and forcing sharp cuts in future years if lawmakers overspend now.
"What we're doing is fighting as hard as we can so that never happens," he said.
Democratic legislative leaders gave a tepid response to Brown's initial budget plan in January, rejecting his proposed cuts to college scholarships and child care providers while insisting they would push to increase spending on social welfare programs.
Brown had proposed a $122.5 billion budget that kept general fund spending mostly flat. The Democratic governor called for more than $3 billion in cuts because of a projected deficit he pegged at $1.6 billion. His administration later acknowledged it miscalculated health care costs.
His less-dire budget now cites increased revenue based primarily on higher capital gains. His finance director, Michael Cohen, said the deficit is now pegged at about $400 million.
Senate President Pro Tem Kevin de Leon, D-Los Angeles, called the plan an improvement from his January proposal.
Assemblyman Phil Ting, a San Francisco Democrat, chairman of the Assembly Budget Committee, said the state's economy is in good enough shape to "craft a budget that helps more of our people prosper and build a better future for their kids."
That includes preserving middle-class college scholarships, increasing Medi-Cal payments to doctors and funding affordable housing, he said in a statement — none of which were included in the governor's proposal.
Assembly Minority Leader Chad Mayes, a Yucca Valley Republican, called Brown's latest budget "a bait and switch," citing voters' approval last year of tax increases that he said were meant to fund health and dental care and support schools. Brown's budget siphons that money to general state spending instead, Mayes said.
The ranking Republican on the Assembly Budget Committee, Jay Obernolte of Hesperia, was kinder, adding that the revised budget makes some responsible choices based on the state's fiscal uncertainty. He praised Brown's plan to pay down part of the $200 billion of unfunded pension health care liabilities.
Brown proposes to use much of the tobacco tax increase to cover normal growth in Medi-Cal, a publicly funded health plan that covers 1 in 3 Californians. The initiative had been promoted by doctors, dentists and others who thought the money would be used to increase their payments, which are significantly lower than private insurance.
The budget negotiations come as the U.S. Congress considers repealing former President Barack Obama's health care law, which California embraced to add nearly 4 million people to Medi-Cal. Administration officials say under a bill passed by the House last week federal funding for Medi-Cal would fall by $6 billion in 2020 and by $24 billion by 2027.
"We've got ongoing pressures from Washington, and the economic recovery is not going to last forever," Brown said.
Tax collections have slowed since the governor's previous spending plan was released. Revenue in April — the most important month for tax collections because of the deadline for filing personal income taxes — fell far short of expectations.
The Legislature has until June 15 to approve a budget for the fiscal year starting July 1.
