SACRAMENTO -- California's nonpartisan legislative analyst on Monday added another seal of approval to Gov. Jerry Brown's budget proposal, calling it fiscally disciplined but raising questions about one source of school funding.
The positive review comes despite a $1.9 billion difference between the analyst's November examination of the state's fiscal picture and the governor's new budget proposal, which declared a deficit-free $97.7 billion general fund spending plan.
The budget is "roughly in balance," said Legislative Analyst Mac Taylor. The governor's focus on fiscal restraint "is really critical because we still face a lot of risk," including whether Congress can come to agreement on raising the national debt ceiling.
On Thursday, Brown unveiled what would be California's first balanced budget in years with projected future surpluses, thanks largely to previous grueling program cuts and voters who in November approved his $5.6 billion annual tax-hike measure, Proposition 30.
Giving Brown some breathing room were: Higher tax revenues from the new voter-approved taxes; more savings from dissolving redevelopment agencies and cap and trade auction sales; health taxes and fees; and lower repayments of special fund loans.
The governor's assumptions were "reasonable," Taylor said, though the revenue picture will be more clear in May after tax receipts come into state coffers and other economic conditions are factored into projections.
The administration was pleased that the analyst "agrees with the governor's assessment," said H.D. Palmer, spokesman for the Department of Finance. "Given the potential risks to our forecast -- both from Washington and overseas -- fiscal restraint is a prudent insurance policy."
But Taylor questioned Brown's decision to divert into K-12 schools and community colleges all of the money from Proposition 39 -- the ballot measure that closes corporate loopholes and requires $500 million to be spent annually on energy efficiency programs.
Schools and community colleges will get $56.2 billion in 2013-14 -- $2.7 billion more than last year. But that total is boosted by counting in the general fund Proposition 39 money, which will go exclusively for energy efficiency programs in schools under Brown's budget.
"The voter pamphlet is very explicit: the money is supposed to be transferred to an energy fund and would not count towards Proposition 98 money," Taylor said, referring to the state's school spending law, which requires roughly 40 percent of general funds to go to schools. "We have a difference on the legal view of that. Their view results in less money for schools. But it's not a huge effect and it doesn't last past five years, so it's not a crucial issue."
By counting the energy money as general funds for school funding, it "crowds out" $190 million that otherwise would have gone into the classroom, Taylor said.
Senate Republicans, in their own fiscal analysis, blasted Brown for using only 40 percent of Proposition 30 money for schools by funneling the tax dollars into the general fund.
"Education will not get the full benefit of those tax hikes, as voters were led to believe," the GOP report said. "If Proposition 30 revenues were dedicated solely to education, funding for the state's schools and community colleges would be about $2.3 billion higher in 2012-13 and $3 billion higher in 2013-14 than the governor is proposing."
Taylor said he commends Brown's proposed policy changes for colleges and universities, such as putting into place plans to improve graduation rates and increase the community college transfer rate. But he criticized the governor for guaranteeing 4.5 percent annual increases to universities for the next five years.
"If you really think there are serious concerns, why guarantee a stream of payments before you put in accountability measures?" Taylor said. "What incentive is that to change the way they operate?"
Taylor said he was pleased that Brown is seeking a simplified funding formula for schools by eliminating dozens of mandated programs, though he conceded the governor is in for some long negotiations over his plan to allocate more money to schools with high populations of at-risk students.