Gov. Jerry Brown signs on-time budget into law

Gov. Jerry Brown's signing of the state budget Thursday was a sharp contrast from the grim visages and rueful statements that came with the past decade's spending plans.

Instead, Brown and legislative leaders wore big smiles and proclaimed a new era of fiscal stability and aid for struggling Californians as the governor signed the $96.3 billion spending document into law at the State Capitol.

"It is a big day for school kids, it is a big day for Californians who don't have health care or don't have adequate health care," Brown said, claiming other states are studying California's plan enviously to see how it was accomplished.

Most new revenues -- driven by the Proposition 30 income- and sales-tax hike that voters approved in November, plus a resurgent economy -- will go to K-12 education, which is always the general fund budget's largest section. This budget dedicates 41 percent of its funding to public schools, and every district will get more money to spend per pupil, while disadvantaged students will get even more funding.

But the budget also starts restoring some of the deep cuts made in recent years, with funding for dental care for the poor, child-care subsidies for working families and beleaguered trial courts. Meanwhile, it creates a $1.1 billion reserve and makes small payments toward the state's $27 billion "wall of debt."

The governor acknowledged California still has sizable long-term liabilities -- most notably its public employee pension funds -- but said that for the first time in years it has a balanced, on-time budget that addresses Californians' needs while remaining fiscally responsible. He used his line-item veto power to pare about $40 million, spread across a long list of programs, from the Legislature's plan.

State Senate President Pro Tem Darrell Steinberg said "budgets represent signposts of great progress or difficult times," and this one is the former: "Real people, hurt for so long, will get some help."

The biggest noneducation budget increase this year is for mental health services, he noted. "Thousands of people will benefit as a result, no more desperate family members having to see their loved ones in emergency rooms or in jails or on the streets."

Assembly Speaker John Perez, D-Los Angeles, said the budget "builds on the progress we've made over the last couple of years; he added that he's proud that California is creating jobs at a faster rate than any other state.

"It is a budget that says the fiscal health of the state is on the mend ... but also that we're committed to the health and well-being of all of the people who live in California," Perez said.

Among Perez's and fellow Democrats' biggest wins in this budget are middle-class scholarships, which will kick in for eligible Cal-State University and University of California students in the 2014-15 school year. When fully effective in 2017-18, they'll cover 10 percent of tuition and fees for families earning between $125,000 and $150,000; 25 percent for those earning less than $125,000; and 40 percent for those with a family income of $100,000 or less. CSU alone estimates 150,000 students may qualify.

Brown also Thursday signed a separate bill to expand Medi-

Cal eligibility to more than 1 million low-income people and streamline the program's eligibility and enrollment rules -- a key part of implanting the federal Affordable Care Act, known as Obamacare.

The state Senate approved the main budget bill 28-10 while the Assembly passed it 54-25 two weeks ago, with Republicans in both houses opposed.

Senate Republican Leader Bob Huff, R-Brea, said the budget "includes some positive steps forward in education funding and reform, but it does not keep the campaign promises made to Californians that all the money from the Proposition 30 tax increases would go to fund schools." He said he's also disappointed that the budget doesn't pay down enough debt or address the state's huge pension liabilities.

"Keeping promises to the people of California on education funding and paying off our state debt load so as not to burden future generations with our mistakes should have been the first priority, but unfortunately that did not happen," he said.

California Chief Justice Tani Cantil-Sakauye said she's "both pleased and concerned." On one hand, it's the first time in five years that the judicial branch hasn't taken more cuts, "the first step in the long road to restoring funding."

"On the other hand, we have a long way to go. In the last several years, about $1 billion in general fund support has been taken from the judicial branch," she said. "And we are out of one-time solutions and funding transfers to blunt the impact of such massive budget reductions in the future."

The extra $63 million in this year's budget may not be enough to reopen closed courts, bring back laid-off workers or stop furloughs, she said, "and it absolutely won't be enough to provide the kind of access to justice the public deserves."

California Budget Surplus: Golden State Debates What To Do With Extra Money

SAN FRANCISCO -- The late rapper Notorious B.I.G. may have been have hailed from New York, but his immortal maxim, "mo' money, mo' problems" has surfaced in the Golden State.

Earlier this week, California Gov. Jerry Brown unveiled his revised budget plan for the fiscal year that begins in July. It reaffirmed something that many in government have been predicting for some months: the state may be headed for a multi-billion dollar budget surplus resulting from the rebounding economy and a tax hike approved by voters last November.

The notoriously cash-strapped state spending less than it takes in hasn't occurred in more than a decade. Unsurprisingly, a lot of people have a lot of different ideas about how that money should be used -- from restoring government programs slashed from years of budget cuts to paying down the massive collection of debt obligations that the Los Angeles Times called a $28 billion cloud hanging over the state's future.

Though much of the surplus could be automatically diverted into the state's public education system, that hasn't stopped some in Sacramento from drawing up their own wish lists for what to do with the additional revenue.

Assembly Speaker John Perez (D-Los Angeles) said last week that his spending priorities include putting more money toward child care for poor families and providing increased financial assistance to college-bound Californians. "It's about responsibility," Perez told the Associated Press. "It's not about walking away from our obligations."

Other suggestions proffered by Democrats have included increased spending for the state's low-income Medicaid welfare program MediCal, reversing some of the deep cuts that have devastated the state's court system and increasing funding to job training programs. Some of these ideas were incorporated into the spending portion of the budget Brown made public on Tuesday.

Because Democrats hold supermajorities in both houses of the state legislature, not to mention a recent legal shift allowing the passage of a budget with a simple majority, the California GOP has been almost entirely shut out of the process.

Staying true to his public image as a voice of fiscal restraint Brown urged, well, fiscal restraint.

"Everybody wants to see more spending -- that's what this place is, it's a big spending machine," said the governor at a press conference in Sacramento earlier this week. "But I'm the backstop."

"It's not time to break out the champagne," he added.

That doesn't mean the administration is content to just stick the surplus in the bank and be done with it.

"Brown wants to use lot of this money for his new school funding program, where more money would be targeted toward schools in impoverished areas and with large percentages of non-English speakers, but a lot of members of the legislature don't seem to keen on this," San Jose State political science professor Larry Gerston said. What may ultimately happen is a compromise, with the governor agreeing to kick in some money for legislators' favored programs in exchange for getting more funding for schools, he said.

However, Gerson told HuffPost he's unsure this surplus will materialize. "California has a long history of promising surpluses that never actually come to be because predicting government income in our state is notoriously difficult," he explained. "When 75 percent of our revenues come from from a single [income] tax that primarily falls on high earners, one bump in the economy and your projection could be off by billions of dollars."

Gerston said he doesn't see as politically likely using the money to pay down any of the state's long-term debt obligations with anything more than a token contribution, even though the release of the original surplus projection in January is what triggered Standard & Poor's to boost California's credit rating.

The California legislature has until June 15 to approve Brown's budget.

Via Huffington Post