Published: Monday, May. 13, 2013 - 1:57 pm
Last Modified: Tuesday, May. 14, 2013 - 1:02 am
SACRAMENTO, Calif. -- California was a poster child for fiscal calamity during the Great Recession with budget deficits larger than the annual spending plans of many other states.
Its credit rating was the lowest of any state at one point and drawn-out budget fights forced state officials to hand out IOUs. Today, so much tax revenue is pouring in that lawmakers face a different problem: Too much money.
Gov. Jerry Brown is pledging to restore fiscal sanity to the state and wants to fortify funding for schools serving low-income students while paying down the state's short-term debt. He is expected to champion restraint Tuesday when he releases his updated spending plan for the fiscal year that starts July 1.
Yet, his fellow Democrats who control both houses of the Legislature have ideas of their own. They want to spend money restoring safety-net programs for children, women and the poor that were eliminated or severely cut during the recession.
Many Democratic lawmakers want to restore adult dental care for the poor and expand mental health care. Doctors, hospitals and other health providers want the state to end a 10 percent Medi-Cal reimbursement rate cut. And children's and health advocates are pushing to restore health care services, if not expanded to all Californians.
Brown said last week that California needs to pay down its debt, which "frees up money" to spend on education, health care and other neglected needs.
H.D. Palmer, the governor's finance spokesman, said the governor believe that is the best way for the state to repair its finances. Standard & Poor's upgraded California's credit rating from A- to A in January and Fitch Ratings gave the state a positive outlook in March.
Brown included the additional sales and income tax revenue approved by voters last fall in the $97.6 billion general fund budget he announced in January. Since then, personal income taxes, which are the state's largest source of revenue, have come in ahead of the administration's estimates by $4.5 billion.
Budget experts say education is expected to take the largest share of that extra money under the state's complex school funding formula.
Brown is taking advantage of the surplus to push for a new way to fund K-12 schools. His plan would channel additional money to schools with high levels of low-income and non-English speaking children.
But that has received pushback from an unlikely source - Democratic lawmakers.
Many of them represent more affluent areas that would not receive the additional money Brown wants to funnel to the poorer school districts. Democratic lawmakers in the state Senate are proposing an alternative that does not include extra money for school districts where more than half of students are low-income.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he supports more money for children from low-income families but believes the money should follow the child - even if he or she lives in an affluent community.
"There's give-and-take here; we don't issue dictates," Brown said. "But the idea of putting money where the kids have the biggest challenge in the schools or districts that have the biggest challenge because of the concentration, that's the core idea."
Brown and state lawmakers also will have to work out changes to the state's Medicaid program to get ready for the Affordable Care Act, which takes full effect next year.
While the state has agreed to expand Medi-Cal to some 1.4 million low-income residents, Brown and Democratic lawmakers disagree on details of the enrollment and implementation process. Brown also is pushing to reduce local government support for indigent care, a move opposed by health advocates.
Republicans say the governor is not as fiscally restrained as he claims to be. Brown is championing the $68 billion high-speed rail system despite a decline in public support and questions over how the project will be financed.
Senate Minority Leader Bob Huff, R-Diamond Bar, said Democrats also have not done enough to address long-term obligations such as public pension underfunding.
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