SACRAMENTO -- California schools would get $1 billion more than proposed in January to enact stringent new "common core" academic standards, plus almost a quarter-billion dollars more as part of his education-funding overhaul, under a revised but still-tight budget proposal Gov. Jerry Brown released Tuesday.
The added K-12 funding is made possible by a cash windfall of almost $4.6 billion that the state has enjoyed in the first 10 months of this fiscal year, mostly due to better-than-expected personal income tax revenue. Proposition 98, an education funding measure passed by voters in 1988, requires that a significant chunk of that money go to schools.
But the May revision also includes a downward shift in the short-term economic outlook because the federal government did not extend the partial payroll-tax "holiday" that was in place for 2011 and 2012. That means forecasted personal income growth in 2013 has been almost halved, from 4.3 percent to 2.2 percent. That fact, coupled with the federal budget sequester, calls for renewed fiscal caution in California, the budget proposal says.
So while the picture is a bit brighter for schools, Brown's proposed general-fund spending is now $96.4 billion for the budget year starting July 1 -- and that's $1.3 billion less than he proposed in January.
"For the first time in more than a decade we've got a balanced budget and it's solid," Brown said at Tuesday morning's news conference, adding: "We have money to invest in education because of Proposition 30," the sales tax and income-tax hike for the wealthy that voters approved in November.
"There are risks," Brown cautioned. "We have to be planning for the next 14 months, and the next 14 months have not yet happened. ... This is a prudent budget."
Brown's revised budget still includes his plan from January to revamp education funding, directing more money to schools with disadvantaged students and giving districts more control over how to spend the state's money. The plan he released Tuesday would boost the money under local control by $240 million, to a total of $1.9 billion.
When fully implemented, it's projected that the new local-control funding formula will spend 80 cents of every dollar on base grants for every district; 16 cents in supplemental funding for every English learner, student from a low-income family, or foster child in a district; and four cents for those districts with a particularly high concentration of these students.
The "concentration funds" would only be a small part of education spending, the governor's office says, but are vital to districts facing the biggest challenges. The May revision also strengthens the proposal's accountability measures to make sure the targeted, at-risk students benefit from the money.
"I think the idea, in a Democratic Legislature, of helping the less advantaged is very persuasive," Brown said, citing the big differences in school funding between rich communities like Piedmont and poor communities like Compton. "This formula recognizes the differences in a way that is not only just, but is crucial to our future well-being."
MediCal's costs are $467 million higher than anticipated in January, mostly due to the
The new budget plan proposes $48 million more in CalWORKs welfare-to-work funding for job training and subsidized job opportunities, and $72 million more for county probation departments that are grappling with their added workloads under the state's prison realignment plan.
But although plagued by downsized staffs, service reductions and darkened courtrooms because of bone-deep budget cuts over recent years, "the judiciary is getting the same amount of money they were given the year before," Brown said. The courts will have to struggle to contain growing costs without any receiving any new resources, he added.
Environmentalists expressed dismay that Brown's revised budget plan shifts half a billion dollars of the funds generated by new cap-and-trade fees -- part of the state's landmark law to reduce carbon emissions that contribute to climate change -- as a one-year loan to the state Finance Department.
"This means the governor will be delaying opportunities to use those funds to actually get critical reductions in global warming pollution at the time when all science shows that we must reduce those emissions as much and as quickly as possible," Kathryn Phillips, director of the Sierra Club California, said in a statement. "This shift in funds is extraordinarily disappointing. The governor is using bizarre accounting to 'balance' the budget and making future generations pay the price with climate disruption."
Brown in January had unveiled the first good-news state budget California has seen in years, which he said would boost investment in education, implement health-care reform and maintain fiscal stability while projecting surpluses for years to come. That budget blueprint aimed to pay down debt and create a $1 billion reserve, offering a degree of stability the Golden State hasn't seen in more than a decade.
Brown at that time had called it "a breakthrough" after years of stormy fiscal seas, but had acknowledged that California still faces budget risks such as a huge federal deficit, an uncertain economic recovery, federal or court blockage of proposed state budget cuts, and potential increases in health-care costs. And Brown had said his plan relied upon being disciplined enough to disappoint any over-exuberant lawmakers who wish to instantly restore many of the deep cuts made in recent years to social services, health care and other sectors.
Assembly Democrats last week rolled out their "Blueprint for a Responsible Budget," calling for "fiscal responsibility, a stronger middle class and less government red tape." Their plan includes putting a rainy-day fund measure on the 2014 ballot, to replace one that Democrats accepted in 2010 but don't like. They also want to speed up the state's debt payments.
But they also hope to help the cash-strapped court system, improve services for veterans and create new middle-class scholarships for college students. And state Senate Democrats hope to restore funding for MediCal adult dental care, mental health services, and job training for the poor.
Health and human services advocates and recipients planned rallies Tuesday in Oakland, Sacramento, Los Angeles, Riverside and Fresno to call for restored funding, pointing out the Golden State's sorriest claim to fame: More than one in five California children live in poverty.
California's cash situation has improved since January. State Controller John Chiang announced two weeks ago that total revenues for the fiscal year's first 10 months exceeded Brown's January projections by $4.6 billion (6.1 percent), due largely to $4.4 billion (8.5 percent) in better-than-expected personal income tax revenue. In fact, for the first time in nearly six years, California closed out a month without borrowing from internal state funds to pay its bills.
But the nonpartisan Legislative Analyst's Office has warned that this is probably a one-time surge, largely from tax receipts of wealthy people cashing out capital gains and dividends before Congress raised their federal tax rates in January. And a more recent LAO report says that under Proposition 98, much of the new money might have to go to schools and community colleges to make up money "deferred" in previous years. Around $40 billion has been cut over the last five years, much of it from public schools, higher education and social safety-net programs.
Schools will get some relief from Proposition 30. Brown's January proposal called for spending $56.2 billion of a $97.7 billion budget on K-12 education and community colleges -- up from $47 billion just two years ago.
Yet "this is not the time to break out the champagne," Brown said Tuesday, saying no matter what estimate you use for the state debt, it's still big enough to require prudence, not exuberance.
Asked about pending legislation and a proposed ballot measure to enact an oil-severance tax to raise more money for education, Brown replied: "We just got a nice tax ... and I think we ought to take a deep breath and let people see how we're spending it in a wise way before we ask for anything else."
Staff writer Steven Harmon contributed to this report. Josh Richman covers politics. Contact him at 510-208-6428. Follow him at Twitter.com/josh_richman. Read the Political Blotter at IBAbuzz.com/politics.