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Gov. Jerry Brown’s budget plan is here

By Josh Richman
Monday, January 10th, 2011 at 10:27 am in Jerry Brown, state budget.

…straight from the horse’s mouth:

Sacramento – Governor Jerry Brown will release a balanced state budget today that slashes spending by $12.5 billion, including an eight to 10 percent cut in take-home pay for most state employees, and proposes a “vast and historic” restructuring of government operations.

“These cuts will be painful, requiring sacrifice from every sector of the state, but we have no choice,” Brown said. “For 10 years, we’ve had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth.”

Brown’s budget also calls for temporary continuation of taxes while the state pays off debt, moves forward with his realignment plan and consolidates or eliminates functions.

“Since it will take some time to fully implement these changes, I propose to ask the voters for a five-year extension of several current taxes so that we can restructure in an orderly manner,” the Governor explained.

He said the proposed spending plan, which puts $1 billion into a “rainy day” reserve fund, closes California’s budget deficit “now and into the future.”

The Governor said his realignment plan, which he called “vast and historic,” will return decisions and authority to cities, counties and schools and “allow government at all levels to focus on core functions and become more efficient and less expensive” by reducing duplication of services and administrative costs.

The one area of state spending spared from cuts is kindergarten through 12th grade education.

“Schools have borne the brunt of spending reductions in recent years, so this budget maintains funding at the same level as the current year,” the Governor said.

Brown’s budget proposes total spending of $127.4 billion for the 2011-12 fiscal year. Of this amount, proposed General Fund spending is $84.6 billion.

The spending plan eliminates an 18-month budget gap estimated at $25.4 billion, comprised of a current year shortfall of $8.2 billion and a budget year shortfall of $17.2 billion. A combination of $26.4 billion in actions is needed in order to have a $1 billion reserve. In addition, the deficit will grow to $26.6 billion if the proposed sale of state office buildings, blocked by court order, does not proceed, requiring $27.6 billion in budget actions in order to have a reserve.

Brown’s budget proposes $12.5 billion in spending reductions, $12 billion in revenue extensions and modifications, $1.9 billion in other solutions to close the gap and provide for a $1 billion reserve.

Major spending reductions include $1.7 billion to Medi-Cal, $1.5 billion to California’s welfare-to-work program (CalWORKs), $750 million to the Department of Developmental Services, $500 million to the University of California, $500 million to California State University, and $308 million for a 10 percent reduction in take-home pay for state employees not currently covered under collective bargaining agreements. Brown also plans to trim state government operations by $200 million through a variety of actions, including reorganizations, consolidations and other efficiencies.

The Governor’s spending plan proposes additional reductions throughout state government, including corrections, the judiciary and resources.

The budget also proposes to change the role that state and local governments play in local development activities by eliminating state tax benefits for enterprise zones and phasing out the current funding mechanism for redevelopment agencies. This will return billions in property tax revenues to schools, cities and counties and help pay for public safety, education and other services.

The revenue component of the budget calls for an election this coming June where voters will be asked to continue current personal income and sales taxes, as well as the Vehicle License Fee rate, for five years. Brown said revenue from the sales tax and the vehicle license fee will be transferred directly to local governments to finance the first phase of his realignment plan.

Brown’s budget also requires all corporations to use a single sales factor when measuring income attributable to California and calls for an amnesty program for taxpayers who have avoided or underreported income owed to the state.

Brown called the spending plan “a tough budget for tough times” that will close the state’s structural deficit and provide a “strong and stable foundation” to meet future needs.

“Without decisive action, the state’s severe budget problems will persist, threatening economic recovery, job growth, public education and the quality of life in California,” he said. “The adoption of this budget will position the state to lead the country as it slowly recovers from the Great Recession.”

The Governor’s spending plan assumes that all statutory changes to implement budget actions will be adopted by the legislature in March, allowing the necessary ballot measures to be put before the people at a June special election.

The Governor’s news conference will be streamed live this morning at 11:00 a.m. at www.calchannel.com. The budget, in full, will be posted online shortly after the news conference begins at: www.ebudget.ca.gov.

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  • Brad Mayer

    You don’t say a d#$n thing about the INCREASED funding to the California Department of Corrections and Rehabilitation, see http://documents.latimes.com/jerry-brown-proposed-budget-2010-2011/ , pg 133

    “Augment, restore, increase” Doesn’t sound like cuts to me! Either your reportage lies, of more likely is just ignorant.

    Care to check it out again?

  • Josh Richman

    Uh, time for a deep breath, Brad, then look again: “Straight from the horse’s mouth,” followed by a blockquoted passage, means it’s not my reportage. Guess I should’ve made it clearer, but this is the news release Brown’s office put out before his press conference yesterday, posted verbatim. If you want a Bay Area News Group analysis of the proposed budget’s prison spending, the Mercury News’ Karen de Sa had the story today.

  • http://Moravecglobal.com Transparency

    Millions of $ can be freed up by University of California Chancellors by controlling their waasteful spending. An example follows. Just how widespread is the budget crisis at University of California Berkeley? University of California Chancellor Robert J Birgeneau’s ($500,000 salary) eight-year fiscal track record is dismal indeed. He would like to blame the politicians, since they stopped giving him every dollar he has asked for, and the state legislators do share some responsibility for the financial crisis. But not in the sense he means.

    A competent chancellor would have been on top of identifying inefficiencies in the system and then crafting a plan to fix them. Competent oversight by the Board of Regents and the legislature would have required him to provide data on problems and on what steps he was taking to solve them. Instead, every year Birgeneau would request a budget increase, the regents would agree to it, and the legislature would provide. The hard questions were avoided by all concerned, and the problems just piled up to $150 million of inefficiencies….until there was no money left.

    It’s not that Birgeneau was unaware that there were, in fact, waste and inefficiencies in the system. Faculty and staff have raised issues with senior management, but when they failed to see relevant action taken, they stopped. Finally, Birgeneau ($500,000 salary) engaged some expensive ($3 million) consultants, Bain & Company, to tell him what he should have been able to find out from the bright, engaged people in his own organization.

    In short, there is plenty of blame to go around. Merely cutting out inefficiencies will not have the effect desired. But you never want a serious crisis to go to waste. An opportunity now exists for the UC President, Board of Regents, and California Legislators to jolt UC Berkeley back to life, applying some simple oversight check-and-balance management principles. Increasing the budget is not enough; transforming senior management is necessary. The faculty, Academic Senate, Cal. Alumni, financial donors, benefactors await the transformation of senior management.
    The author, who has 35 years’ consulting experience, has taught at University of California Berkeley, where he was able to observe the culture and the way senior management work.

    (Cal. (UC Berkeley) ranking tumbles from 2nd best. The reality of UC Berkeley) relative decline are clear. In 2004, for example, the London-based Times Higher Education ranked UC Berkeley the second leading research university in the world, just behind Harvard; in 2009 that ranking had tumbled to 39th place.)

    University of California, Berkeley in the news

  • maria campos

    A big solution to the State Budget is to do what I hear floating around as an idea.

    To have Employers Release sponsored programs where the Employer will post a bond. Hires non-violent, first time offenders at a current ongoing salary with health benefits, 20%0 of offender salary goes to pay for this program.

    Offender gets rehab. Does not learn more criminal behavior, he is productive to society and he pays his taxes.

    Employer get loyalty.

    State gets better citizens, is less expensive and is a safer society.

    Recidivism is 70% for prisons. It is clearly not working. Guards, union etc. are making the money.

    Maria Campos

  • maria campos

    Overcrowding of Prisons and freeing money from the State Budget can also be achieved by amending the three strike law. It is silly to place an offender in jail for 25 years to life at taxpayers expense for stealing a pizza.

  • maria campos

    Another measure to savings for the state is to amend the sex registration for non-violent offender. When they come out, they do not have a place to go because relative live within a mile of a school. They do not have support and the job front is very dim.

    Considering that a “sex offender” is am 18 years having consensual sex with a 17 year old and the parents getting upset and pressing charges.

    or when in a college setting students get drunk, don’t even remember the night before and get sent to prison for 25 years. Wasting many productive lives.