Gov. Jerry Brown this week predicted that his 2012 pension law will survive union challenges in court and blow a hole in the so-called "California rule" that has restricted changes to public employee retirement plans for half a century. Jerry Brown on Wednesday proposed spending nearly none of it, sticking with his traditionally restrained approach in his final budget. "That is just the reality". "I believe Gov. Brown's budget reflects a thoughtful starting point for this year's budget negotiations".
Republican Board of Equalization member George Runner, who represents the Mother Lode, says, "It's a smart move by the governor to boost the state's rainy day fund (by $10-billion), since as he warns, the threat of a recession still looms, and California is still very much vulnerable to boom-and-bust budgeting".
One of the biggest goals involves filling the Rainy Day Fund with a $3.5 billion supplemental payment plus a constitutionally required transfer. The Democratic governor projects California will have a $6.1 billion surplus but he wants to keep almost all of it in reserve for a future recession.
"We have to be on our guard", he said.
It should not be lost on the public that as state revenues continue to grow, the state continues to face massive costs, debts and liabilities.
"Californians worked incredibly hard to pay these record high taxes and deserve the absolute best return for their hard work", said Senate Republican Leader Patricia Bates, R-Laguna Niguel.
Alas, Brown's comparatively disciplined approach on reserves is likely as good as the state can hope for, given the Legislature's disregard for fiscal responsibility. The governor went beyond those requirements in the new proposal by adding $3 billion to the program that targets disadvantaged schools, the Local Control Funding Formula he championed in 2013.
The governor didn't ignore the soaring stock market and relatively strong employment figures, but said they don't detract from reasons to prepare for a downturn. Brown's fresh investment would fully fund it two years ahead of schedule.
"We can't turn on a dime in a downturn", he said.
"We have to have a reserve", said Michael Cohen, state's Department of Finance director. That's less than the $1 billion from earlier estimates.
"We have to set some money aside whether it's for wildfire costs or Medicare", Cohen said.
Brown's budget proposal comes amid federal budget uncertainty.
The minimum guarantee of funding for K-14 schools in 2007-08 was $56.6 billion and dropped to $47.3 billion in 2011-12 at the peak of the state budget crisis. His May budget revisions could include a response to federal changes.
Asked about how his spending priorities over the past seven years might affect his legacy, Brown deflected.
Controller Betty Yee released her December cash report Wednesday that showed revenues for the fiscal year so far are $2.79 billion above June's budget expectations of $16.25 billion.
Senator Bill Dodd, D-Solano, agreed that education is one of those critical services worth the investment. The plan had its first hearing Wednesday and would allow taxpayers to give a charitable contribution to the state's coffers in lieu of paying taxes. They could then deduct that from their federal tax bill.
Personal income taxes came in 25% higher at $11 billion in December.
Brown acknowledged Wednesday that he's been lucky to have an expanding economy and an electorate willing to enact higher taxes.
In 2015-2016, 43 percent of the state's more than 2 million community college students qualified for free tuition as low-income students through a fee waiver now called the California College Promise Grant.