Brown Cites Fable In Bid To Limit New Budget Spending

Update 05:00 p.m.: Revenues Higher Than Last Year, Not As High As Expected

Update 04:03 p.m.: Brown’s Budget Draws Fire, Praise From Progressives

Gov. Jerry Brown’s revised California budget proposal Friday drew criticism from progressive policy advocates - even as they praised some of its changes to the state’s health care system.

Chris Hoene with the California Budget & Policy Center strongly disagreed with the governor’s opposition to new spending in the budget. Hoene said the $2 billion Gov. Brown is putting into the state’s “rainy day fund” could be used for programs like child care, preschool and welfare.

“There is certainly more room for making investments in this year’s budget that would help the people who have been left behind by the cuts we have not been able to restore coming out of  the recession,” Hoene said.

Mike Herald, health advocate for the Western Center on Law & Poverty, said the most significant proposal is to use $2 billion in future Proposition 63 mental health funding to address chronic homelessness in California. This idea was first proposed by state Senate leader Kevin de León (D-Los Angeles) in January.

“One only needs to step right outside the Capitol, a block away, to encounter the overwhelming number of people who we see living on our streets, and we’re really happy that our government took the step and embraced that proposal today,” Herald said.

Anthony Wright, executive director of Health Access California, praised a key part of last year’s state budget deal that takes effect Monday. Children under the age of 19 who are living in California illegally will be eligible for full-scope Medi-Cal benefits. The governor’s latest proposal continues this program and pegs the full-year cost at $188 million.

“We are going forward in the next week to cover all children regardless of immigration status. That’s a great step, but we need to make sure their parents are enrolled as well,” Wright said.

Brown’s proposal also includes an $86.4 million increase to provide federally required Behavioral Health Treatment services. The funds will come from the state’s Developmental Services system.

Update 03:00 p.m.:  A governor who loves to use props and parables to prove his points asked his staff to give reporters copies of “Aesop’s Fable: The Ant and the Grasshopper” along with his updated budget Friday.

The moral of the story, and Brown’s clear message to Democratic lawmakers pushing for more spending despite lower revenues: “It is best to prepare for the days of necessity.”

“To me, it’s so obvious,” the governor told reporters at the Capitol. “But I have to keep repeating it, because I don’t think people – I don’t think they listen.”

“It’s a hard message,” he continued, “because the whole orientation (of Democratic lawmakers and progressive groups) is to solve problems, even if you don’t have the money to solve them. And then you create another problem that would be later, and then you can blame somebody else.”

Brown includes a few new proposals – for instance, using Proposition 63 mental health dollars for affordable housing and homelessness projects as proposed by Senate Democrats earlier this year.

But he opposes any significant new permanent spending commitments until voters decide this fall whether to extend the Proposition 30 income tax increases on the wealthiest Californians – a ballot initiative he again refused to take a position on.

“I'm leaving that to the people of California,” Brown said.

Some reading material from @GovPressOffice pic.twitter.com/tEoSMew3LL

— Ben Adler (@adlerben) May 13, 2016

Update 11:30 a.m.:  Standing next to charts reading “Deficit Spending on the Horizon,” California Gov. Jerry Brown made his now signature call for fiscal restraint as he released his revised budget for the 2016-17 fiscal year on Friday morning.

Brown’s $173.1 billion spending plan projects a nearly $2 billion drop in revenue compared with his initial budget released in January.

“Like everything else, things don’t last forever. The surging tide of revenue is beginning to turn,” Brown said at a Capitol news conference. “We only have so much funding.”

Brown’s budget team attributes the revenue drop to lower income and sales tax receipts.

The four-term Democratic governor, who often serves as a check on spending proposals from lawmakers in his own party, says building up the state’s rainy day reserve fund remains a top priority. In January, the governor proposed growing that fund from its current $3.5 billion to $8 billion. His revised May budget calls for increasing the reserve to $6.7 billion.

With the slowing revenue projections, Brown says the state can’t afford to finance any “massive programs.”

His budget does endorse, however, a $2 billion bond to fund housing for the homeless. That drew praise from fellow Democrat and Senate President Pro Tem Kevin de León of Los Angeles.

“Homelessness plagues communities across our state so I’m very pleased Governor Brown has embraced the Senate’s bipartisan ‘No Place Like Home’ proposal to direct $2 billion from the Prop 63 bond to bolster local efforts to tackle this crisis,” the Senate leader said in a prepared statement.

Brown’s revised budget also received Republican support, with some strings attached.

“Republicans stand with the Governor in his call for fiscal restraint. Saving for the future and addressing more than $200 billion of existing budgetary debts and unfunded liabilities is the right thing to do,” Assembly Republican Leader Chad Mayes of Yucca Valley said in a prepared statement. “ New spending should be used for one-time critical needs that will help all Californians like water, school and transportation infrastructure.”

Brown’s new budget includes legislation designed to streamline the development of infill, multi-family housing. The governor says it could spur more housing construction, benefiting both developers and homeowners.

“You need more housing,” Brown says. “You need more production, then hopefully the supply will bring down the cost.”

Also Friday morning, Brown declined to say whether he’ll support or oppose efforts to extend parts of Proposition 30, a temporary sales and income tax increase the governor helped pass to benefit schools in 2012.

Given the revenue slowdown and recession that Brown said “is coming,” the governor was asked whether he regrets supporting the state’s future minimum wage hike to $15 per hour.

Brown said “No.”

“Making sure poor people have money in their hands, there’s no bureaucracy in that,” he added.

Brown’s latest proposal will launch the final stretch of negotiations ahead of the Legislature’s constitutional budget deadline on June 15.

Full Budget Summary

Original Post: Gov. Jerry Brown will release an updated California budget proposal this morning – and he’s expected to issue a fresh call to limit new spending.

“Because of the fact that revenues have come in lower than projected, there have been some alterations and changes that have been made to the governor’s proposal that he put forward to the Legislature in January,” says H.D. Palmer with the governor’s Department of Finance.

Personal income tax revenues last month came in roughly $1 billion below projections, a rare budget setback after years of economic recovery.

That doesn’t mean the state is looking at a budget deficit. It does mean that while California’s economy is still growing, it’s growing more slowly than it has been. And that means there’s less money to go around for Gov. Jerry Brown, who’s called for some new infrastructure spending and state building maintenance, and for lawmakers of both parties, who have ideas for where the state should be investing.

Brown’s latest proposal will launch the final stretch of negotiations ahead of the Legislature’s constitutional budget deadline on June 15.

Lawmakers in both parties have put forth ideas on where the state should increase funding. Democrats point to affordable housing, early childhood programs and higher education. Republicans are targeting Denti-Cal, the state’s dental care program for low, income Californians.