Brown Proposes New Spending, Sees Rainy Days Ahead

California Governor Jerry Brown was in his element when he introduced his annual January budget proposal yesterday at the state Capitol. He waved charts and warned of looming recession, even as he called for new taxes and the largest budget of his political career. But he stuck to a familiar theme of fiscal restraint.

It’s become a common sight at Governor Brown’s annual budget proposal, and this one was no different.

"Everybody thinks when they’re up here," Brown says as he taps the high-point on a poster-sized chart showing cycles of economic boom and bust. "It’s all wonderful," 

"That’s what they thought before the dot-com and that’s what they thought before the mortgage meltdown, both of those. So, here we are again," says Brown.

The budget projects $8 billion more revenue to work with than was spent last year. But the governor cautioned against growing government programs.

"We’ve had ten recessions since World War II. We know we’ll get another recession. But, nobody ever plans for it, so it’s always a surprise. Oh my gosh!"

Brown would keep a budget surplus, pay down debt and put $2 billion more than required into the state’s rainy day fund. One Republican lawmaker called that “not terrible.”

Senate Budget Committee Vice Chair Jim Nielsen was more effusive.

"Two years in a row, we’re very happy," says Nielsen. "The governor is encouraging his Democratic colleagues, 'be restrained.'" 

It’s fellow Democrats Brown has clashed with most fiercely during past negotiations, but this year’s budget has some long-sought increases. That includes billions of dollars for education, doubling of the cap-and-trade funds dedicated to affordable housing, and over a billion dollars to fix rundown state buildings. It also adds hundreds of millions for drought and wildfires. Assembly Budget Committee Chair Shirley Weber says it’s better than past years.

"This is a good place to start the conversation—it’s not the end of the conversation—but at least it starts in a better place than we’ve felt we started in the past," says Weber.

The debate on what should change began immediately. Republican lawmakers called for using the surplus to fund services for the developmentally disabled, while Democratic leaders also added early childhood education and housing for the homeless. Community college faculty called for more money. Samantha Contreras of SEIU says the budget leaves in-home caretakers and their patients in limbo.

"Families and providers are dependent on this for a living. And these are people living with autism, quadriplegics, these are people who need serious care," says Contreras.

Brown calls for retaining funding for in-home caretakers, but it’s only if lawmakers agree to broaden a tax on managed health care plans. The Legislature has spent the year deadlocked on whether to extend the tax, which would require Republican votes.

Republican Senate leader Jean Fuller doesn’t see that dynamic changing. 

"We do believe that when there is an unanticipated budget income of the amounts we’re seeing that there’s no need for additional taxes," says Fuller.

Similarly, Republicans continue to oppose raising the gas tax, while Brown continues to call for using it to pay for road repairs and upgrades. The governor says he’ll keep lobbying, but acknowledged the stalemate.

"... at the end of the day there are views of the world and they are different and that’s the way it is," says Brown. 

Ultimately, as both policy and politics, this budget largely stays the course Brown has charted in the past. It puts more money toward his priorities—climate change and drought. It grows education, but few other social services. And it leaves lawmakers in both parties wanting more. 

"We have to have dance steps. He has some, we have some, that’s how we do it together," says Assembly Speaker Toni Atkins. 

It’s now the Legislature’s turn to take the lead. Senate and Assembly committees will begin working up their own versions of the budget, en route to the Legislature’s June 15 constitutional deadline.