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Jerry Brown's Budget Revealed: Schools Will Face Cuts If Tax Plan Rejected

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JERRY BROWN BUDGET
AP

SACRAMENTO, Calif. — California faces a smaller budget deficit in the coming fiscal year but will require nearly $5 billion in cuts to public education if voters reject Gov. Jerry Brown's plan to raise taxes in the fall, the governor said Thursday in releasing its budget proposal for the 2012-13 fiscal year.

The governor's office projected the state's budget shortfall for the fiscal year starting July 1 at $9.2 billion, much more manageable than the $26.6 billion deficit the Legislature closed for the current year. Brown said the budget cuts he enacted this year, combined with additional cuts and his call for temporary tax increases in the coming fiscal year will all but end the massive deficits that have defined California's fiscal planning for years.

He also noted that the state is being helped by an improving economy, which has led to a slight increase in tax revenue.

"We've cut the structural deficit substantially, and we now have the possibility of eliminating over the next couple of years the deficits that have plagued California," he told reporters during an afternoon news conference.

Brown was forced to call the gathering suddenly because his Department of Finance mistakenly posted the budget plan online, four days before the governor had said he would release it.

The governor's office estimates the total general fund budget for the coming year at $92.5 billion, about $7 billion more than the current year. The general fund pays the day-to-day operations of California government and is where the budget has been in deficit.

To address California's ongoing shortfall, Brown is trying to gather support for a November ballot initiative that would raise the income tax on those making $250,000 or more a year and boost the state sales tax by a half cent. The higher taxes would raise about $7 billion a year and expire in 2017, a date by which Brown hopes the economy has improved enough to bring a healthy flow of tax revenue back to the state.

If voters reject those tax increases, Brown's budget says he will call for an automatic cut of $4.8 billion from public education. That is equal to three weeks of school.

Earlier Thursday, Brown told reporters "there'll be a lot of cuts" if his initiative fails.

"Cuts are never nice, because government does a lot of good things. But we'll have the tax measure proposal, we'll have some cuts, and then we'll have some trigger cuts in the event that the tax measure does not succeed," he said.

The release of the budget for the coming year comes as California enacts $1 billion in so-called trigger cuts across a wide array of state programs, including higher education, busing for K-12 students and services for the disabled. Those midyear cuts were necessary because tax revenue was coming in much lower than Brown and Democratic lawmakers had anticipated when they passed the current budget last summer.

The Democratic governor said he is willing to call for more automatic cuts if revenue misses the mark again in the current year.

But any cuts the state will make are likely to be felt more deeply than in years past. Since the recession began in 2007, California has seen tax revenue drop $17 billion, necessitating continued cutbacks to nearly all state services.

If voters approve his ballot proposal for higher taxes, Brown will address the $9.2 billion deficit in the coming fiscal year with a near equal balance of spending cuts and revenue increases. If they do not, the state would make $4.8 billion in additional cuts to the K-12 system, $200 million each to the University of California and California State University systems, $125 million to courts and $15 million to state forest fire protection.

Even before voters weigh in on the tax initiative, Brown's budget includes $4.2 billion in cuts to the state's welfare-to-work program, Medi-Cal and child care services. He said the cuts to social service programs mean recipients will have the same amount of money in real terms as they did in the 1980s.

"Were making some very painful reductions," Brown said during the Thursday news conference. "This is not nice stuff."

Additionally, about 70 of California's 278 state parks are scheduled to close starting July 1.

The education cuts to be enacted if voters fail to pass the tax increases would undermine Brown's plans to fully fund public schools and make systematic education reforms.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he takes issue with Brown's proposed cuts to welfare and social programs for the poor. He said he wants to wait a few months to see if the economy continues to improve.

"We're not going to rush to make any of these decisions, especially on the cuts side," he told reporters right after the governor delivered his budget.

He says teachers and students and needy have been impacted by cuts and believes voters will be supportive of Brown's tax proposal.

"Enough of bloodletting," he said.

Brown, who failed to reach a compromise with Republicans last year, indicated he would once again bypass the minority party and pass the bulk of his spending plan with Democratic support.

Jim Nielsen, vice chair of the Assembly Budget Committee, called the governor's plan of raising taxes "business as usual" by Democrats. The Republican from Gerber criticized the governor for not imposing spending restraints, such as a spending cap.

Brown told reporters last week that he wanted to protect school funding as much as possible and that schools could expect to receive even more money than last year, after several successive years of deep cuts.

Brown said his budget proposal also includes "some bold moves."

It would provide seed funding for the much-criticized $98 billion high-speed rail line, statewide water projects, greenhouse gas reductions and clean-energy initiatives. The governor said supporting such efforts was crucial to maintain California's history of innovation.

"This is a strong, confident investment in the future of California," he said. "This is a state that's dynamic, it's creative, and it's prosperous."

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Associated Press writer Juliet Williams contributed to this report.

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