- Read the Governor’s May Revision proposal at www.ebudget.ca.gov.
- Even with added revenue revised plan for all spending is $1.2 billion less than the one he put forward in January
- If they can get out the votes, Legislative Democrats theoretically have both a Republican-proof and Governor's-veto-proof supermajority.
L.A. TIMES: Gov. Jerry Brown unveils cautious budget for deficit-free state
The governor says California's financial condition remains unstable despite a surge in revenue. Only schools will get a substantial boost beyond his January budget.
By Chris Megerian, Los Angeles Times | http://lat.ms/10YwG9J
Gov. Jerry Brown answers a question about his education funding plan at a news conference in Sacramento. (Rich Pedroncelli / Associated Press / May 14, 2013)
May 14, 2013, 8:38 p.m., SACRAMENTO :: California may finally be free of deficits, but Gov. Jerry Brown unveiled a cautious budget Tuesday, saying the state's financial condition remains treacherously unstable.
Brown put lawmakers on notice that he had no desire to ratchet up spending despite a multibillion-dollar windfall of tax receipts in recent months. Saying there is no evidence that the surge will last, he reduced his revenue estimates for the budget year that begins July 1.
Only schools would get a substantial boost beyond what the governor proposed in January, before state income spiked. Most other programs would get little to compensate for cuts absorbed year after year as Sacramento ran deficits.
"This is a prudent budget," Brown said at a Capitol news conference. "We're sailing into some rather uncertain times."
The announcement was far from a victory lap for a governor who plugged the deficit, won a high-stakes campaign to raise taxes and hails from a political party with a tight grip on the Capitol. Brown focused as much on what the state cannot do as on what he hopes to achieve.
He cautioned that the economic recovery has been more dribble than rebound. He said federal tax changes are cutting into workers' paychecks and, by extension, state revenue. He warned about fallout from financial turmoil in Europe.
His spending plan notes — but does not address — other looming financial problems, such as the spiraling cost of healthcare for retired state workers.
Even as he pledged to send more money to schools, Brown tightened his general-fund plan to $96.4 billion, $1.3 billion less than he outlined in January.
"The money is not there," he said. "Anybody who thinks there is spare change around has not read the budget."
That did little to mollify Democrats who want to replenish funds for social services and other programs.
One of Brown's most reliable allies in the Legislature, Senate leader Darrell Steinberg (D-Sacramento), said he found the governor's budget "disappointing" in its failure to "begin making up for some of the damage done to tens of thousands of Californians."
But Brown vowed to continue to resist pressure from fellow Democrats and interest groups to restore some money to adult dental care and to doctors who treat the poor. For upcoming contract negotiations with the state's big public-employee unions, the governor said the state "is aiming low."
"Everybody wants to see more spending," he said. "That's what this place is, it's a big spending machine."
"I'm the backstop at the end," he said. "And I'm going to keep this place in balance."
The governor proposes spending about $1.6 billion more on schools than he outlined in January.
Brown wants to spend most of it — about $1 billion — on helping the state implement new standards for writing and math. The funds could be used for textbooks and testing materials or to train teachers, for example.
The governor said he hoped that money would help build political support for his proposal to direct extra resources to school districts that serve the highest concentrations of poor students and non-native English speakers.
That proposal is among his most controversial ideas. It sets the stage for fraught negotiations with lawmakers who want to spread education money more widely, to serve all districts with disadvantaged students.
"Any change in formula has to result in an increase in funding for all schools," said Assembly Speaker John A. Pérez (D-Los Angeles).
Brown did make a concession to lawmakers: He scrapped a plan to give community colleges responsibility for high-school equivalency programs and other adult-education offerings.
The new proposal would leave responsibility for such programs with K-12 districts, as legislators had requested.
Sacramento will oversee the expansion this year of Medi-Cal, California's healthcare program for the poor, to more than 1 million Californians who do not have health insurance now.
Under Brown's plan, the newly insured would be offered the same benefits as those already covered by the public program, a shift from January. Then, the governor did not include stays in rehabilitation facilities and other long-term care for those who will become eligible for Medi-Cal for the first time next year.
But Brown held the line against a bipartisan push in the Legislature to restore dental care for adults in the program, which had been cut to help balance the budget.
Overall, his administration anticipates $1.2 billion more for Medi-Cal this year than last year, to conform to the federal Affordable Care Act.
Brown estimates the extended coverage will mean counties spend less on care for the indigent — money that comes from Sacramento. He estimates that sum at $300 million. Counties say it is too soon to know what that number will be.
As the state assumes more financial responsibility for healthcare, Brown wants to shift other costs to the counties. He is asking them to spend the $300 million on social welfare programs, including food assistance and childcare, in the next budget year.
The sum would rise to $900 million the following year and $1.3 billion the year after that.
Brown acknowledged that it is not yet clear how much the healthcare overhaul will save counties, that some people will remain uninsured and that local governments will have to care for those residents.
The California State Assn. of Counties called the governor's plan "too aggressive."
It would "force counties to cut into the safety-net services they provide today, including trauma care, emergency services, burn care and public health programs," said Matt Cate, the group's executive director.
Asked about restoring social service cuts made to help balance the budget in years past, Brown was unequivocal: "No," he said. "The money is not there."
Brown's proposal would offer some help to counties that are struggling to handle the inmates the state now requires them to keep in their jails along with parolees who are now supervised locally. He would restore $72 million to county probation departments.
Brown acknowledged the costs for counties was higher than the state had allowed.
But mostly, the spending blueprint for corrections reflects his opposition to federal court orders to further reduce prison crowding. The governor included no money to pay for the plan he recently submitted to judges, under threat of contempt charges, to remove thousands more inmates from state lockups.
Brown, who filed his prison plan under protest and does not support it, is appealing to the U.S. Supreme Court for relief from the population cap. If the state loses, he said, "I'm sure we could find funds" for the plan.
That drew a quick rebuke from Don Specter, an attorney for inmates.
Brown's "budget makes it clear that he is flouting the court orders once again, and we will ask the court to hold him in contempt for his conduct," Specter said.
The governor wants to shift $500 million from the state's Greenhouse Gas Reduction Fund and loan it to the general fund.
The money would come from a system to limit carbon emissions by factories and other big polluters. It allows companies to pay for credits to produce more than their share of carbon emissions.
Borrowing those proceeds would be "extraordinarily disappointing," said Kathryn Phillips, director of Sierra Club California. "The governor will be delaying opportunities to use those funds to actually get critical reductions in global warming pollution," she said.
If the state puts off the reforestation and energy-efficiency projects that money would otherwise pay for, she said, that would delay the positive effects of those projects.
Brown's Department of Finance said in a letter to lawmakers that the loan was appropriate because state agencies need more time to design the best possible programs to help the environment.
Times staff writers Evan Halper, Patrick McGreevy, Paige St. John and Anthony York contributed to this report.
ED WEEK: Jerry Brown Prepares to Do Battle for His California Education Budget
By Andrew Ujifusa, EdWeek | State EdWatch - Education Week http://bit.ly/105Be2N
May 15, 2013 1:47 PM :: For some time, California's budget woes brought to mind a jalopy barely coughing along on a quarter-tank of highly dubious grain alcohol. But thanks to the passage of Proposition 30 last year that lead to broad tax increases earmarked largely for K-12, the prospects have improved, at least from a revenue perspective. And Gov. Jerry Brown, a Democrat, pledged not long after the measure's passage that he would actually simplify things, while also providing a bigger share of funding to districts with the highest proportion of English-language learners and low-income students. In addition, revenues from personal income taxes this year are also ahead of projections, further helping the budget outlook.
The newest budget plan from Brown includes $1 billion in additional spending on K-12 from fiscal year 2013 to fiscal year 2014, thanks to the infusion of Proposition 30 money that helps the fiscal 2013 budget in mid-stream to the tune of $2.9 billion, although the minimum guarantee for state K-12 aid is projected to drop from that level for fiscal 2014.
The Associated Press has examined how Brown's plan for K-12 breaks down.
- Total education spending would increase by $1,046 per student, and the base per-student funding level is $7,895 in the governor's 2013-14 budget plan.
- But the real controversy comes with Brown's weighted-funding formula. As part of his initiative to streamline the state's education-funding system,
- Brown wants to ensure that districts with a higher share of ELLs, low-income students, and students in foster care get a greater share of money.
- That would mean $1.9 billion in education spending specifically directed at those students under the new formula, or about 4 cents more out of every education dollar.
- Those numbers, by the way, were released on May 14, and are a revised version of the initial budget plan Brown released in January. Lawmakers have to pass a spending plan by June 15.
In Brown's new budget plan, there's a breakdown of how exactly the money would flow to districts through the new Local Control Funding Formula. (You'll find the breakdown on page 16 at the link.) In addition to the base grant per student, each district would receive a supplemental grant, based on the percentage of ELL, low-income, and foster children. But districts with a share of those students that tops 50 percent would get an extra boost in education spending through a second formula.
In the example used, a hypothetical California district with 41.9 percent of ELL, low-income, and foster students would have a final per-pupil spending amount of $9,053, while a district consisting entirely of students who fall into those categories would have $12,040 available per student. In an initial review of the January version of this formula, the California Legislative Analyst's Office pointed out that nothing in Brown's plan mandates that the supplemental cash actually go to supplemental services for the targeted students. Brown has reportedly tightened accountability for the supplemental money to try to ensure that it gets spent on the students in question.
Brown's plan also includes $1 billion in funding to implement the Common Core State Standards that districts can spend over the next two years. As John Fensterwald at EdSource notes, the chairmen of the Assembly and Senate education committees lobbied Brown to earmark funds for phasing in the new standards.
It's also worth pointing out that while Brown's budget plan includes an increase in K-12 spending, he said he was taking a cautious approach to spending in other respects, and his revised plan for all spending is $1.2 billion less than the one he put forward in January.
But as AP notes, legislators aren't entirely satisfied with what Brown has put out. As you might imagine, the feeling from some relatively wealthy (or at least middle-class) districts is that the formula won't be particularly fair to them. "The local control funding formula is an interesting problem because it's not really a partisan issue. It's more of a geographic issue," Assemblyman Jeff Gorell, a Republican who serves as vice chair of the Assembly Budget Committee, told the AP. And whether by coincidence or not, the government affairs director for the Chamber of Commerce in Gorell's district in Camarillo, Sean Paroski, also tweeted this on May 14: "W/new formula, $1 of $5 will go to English-learner or low-income students. What do suburban schools think of Prop 30 support now?"
Prominent Democrats, like Senate President Pro Tem Darrell Steinberg, also say they have reservations about how Brown's plan would work, even if they like the general idea, as Fensterwald points out. So Brown has multiple fights on his hands as he presses forward with his plan, and indeed he appears to be approaching them pugilistically, saying that foes of his budget will be in for "the battle of their lives."
CAPITOL DEMS: Senate leader criticizes Brown's school plan
By Chris Megerian, L.A. Times | http://lat.ms/10rt9VE
May 15, 2013, 2:49 p.m. :: SACRAMENTO -- Senate leader Darrell Steinberg says that, for all practical reasons, he should support Gov. Jerry Brown's plan to redistribute school funding. His hometown, Sacramento, would benefit.
"I should be for it," he told reporters on Wednesday. "End of story."
But Steinberg, one of the top Democrats in the Legislature, is helping to lead a counteroffensive against the governor's education funding proposal.
Brown wants to provide more money to school districts with high numbers of students who are poor or English learners.
"I think it's fair. I think it's just," the governor said on Tuesday when he unveiled his revised budget proposal. "I think it has great moral force."
Steinberg said he doesn't dispute the basic idea behind Brown's plan, but he disagreed with the method. Instead of calculating students on a per-district basis, he said it should be done by school.
That way, he said, individual schools could still see more money even if the overall district doesn't have a high concentration of poor students or non-native English speakers.
“If a kid is in a school of concentrated poverty, why shouldn’t that kid get the civil rights benefit that a kid in a concentrated poverty district gets?” Steinberg said.
The senator said he expects Democratic lawmakers will be able to reach an agreement with the governor.
"I'm not drawing lines in the sand," he said.
Sacbee.com/handheld edition: Capitol and California http://bit.ly/10rv0tr
Last Updated 8:02 am PDT 05/15/13 :: Gov. Jerry Brown, dismissive of a surge in state tax revenue that stirred optimism at the Capitol, moved Tuesday to blunt appeals for increased spending, downgrading his budget proposal from January.
The budget revision - an annual exercise opening a month of negotiation with the Legislature - threatened to strain Brown's relationship with Democratic lawmakers and with social service advocates who called Brown's estimates overly conservative and who are lobbying to restore programs cut during the recession.
"He's definitely trying to strike a tone," said Jeffrey Michael, director of the Business Forecasting Center at University of the Pacific.
He said Brown's estimates, though "very conservative," are in line with the Business Forecasting Center's projections.
Despite income tax revenue running about $4.5 billion ahead of expectations through April, Brown said much of that money is unlikely to carry over into future years. He is projecting revenue next fiscal year down $1.8 billion from his January estimate.
The Democratic governor said economic growth will be slower than he previously thought because of federal spending cuts and a higher payroll tax on workers.
"Four percent growth has now become 2 percent growth," Brown said.
He also said much of the income tax revenue increase the state enjoyed this spring will not be lasting, attributing the rush instead to wealthy taxpayers shifting income from 2013 into 2012 to avoid higher federal tax rates. Administration officials said they also expect tax revenue in the final two months of the budget year, May and June, to fall below original estimates.
Brown said California has "climbed out of a hole" with the passage of his November ballot initiative to raise taxes but that "this is not the time to break out the champagne."
Republican lawmakers immediately praised Brown. Assembly Budget Committee Vice Chairman Jeff Gorell, R-Camarillo, said it was "appropriate for the governor to have conservative revenue projections," while Assembly Republican leader Connie Conway, R-Tulare, called Brown "the adult in the room" and predicted the most meaningful fault line in the coming budget debate would run through the Democratic caucus.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said in a prepared statement that Brown's revenue projections would be subject to a "deeper analysis," suggesting a potential dispute about how much money is available to spend.
"I agree we must aggressively pay down our state's debt and set aside money for a reserve, but there's a disappointing aspect to this proposal," Steinberg said. "It's important that we also begin making up for some of the damage done to tens of thousands of Californians. Unless the Legislative Analyst has a different conclusion, the governor proposes few if any resources to restore cuts made over the past few years to the courts, and to health and human services."
The speaker of the Assembly, John A. Pérez, said Brown's revenue projections would be reviewed "in depth," but he told reporters, "I don't believe there are any major areas of disagreement between the Assembly and the governor that cannot be resolved in short order."
Democratic lawmakers will face pressure from social service advocates who said Brown's budget fails to reflect the promise of a recovering economy - or to account for years of spending cuts during the recession.
"The governor's revised budget proposal fails to address our poverty crisis by continuing the steep cuts to safety net programs made during the Great Recession," Vanessa Aramayo, director of the California Partnership, an advocacy group, said in a prepared statement.
Brown expanded in his revised budget on his January appeal to overhaul the state's education finance system, seeking to give school districts greater flexibility over how they spend state money while directing more money to school districts with relatively high proportions of students who are poor or learning English.
Brown proposed Tuesday to increase first-year spending on his education overhaul by $240 million over his January proposal, to $1.9 billion.
Many Democratic lawmakers have expressed conceptual support for the plan but remain in disagreement with the governor on his proposal to award districts additional money if more than half of their students are low-income or meet other criteria.
At a news conference Tuesday, Brown rejected the concern of wealthier, suburban school districts that they will receive less money under Brown's plan than they might otherwise.
"Ask somebody in Beverly Hills or Palo Alto or Piedmont, 'Would you like to move to Compton? Would you like to move to Watts?' " Brown said. "And if they say, 'Yeah, let's do it because I want to get the extra money,' then I'll believe it."
Brown also proposed Tuesday to earmark $1 billion in state education funding to implement English, math and other subject guidelines known as Common Core standards.
Brown called one-time funding for teacher training, instruction materials and technology to implement the standards a "great intellectual move."
Meanwhile, he largely dismissed calls to increase spending beyond education.
"Everybody wants to see more spending," Brown said. "That's what this place is: It's a big spending machine. You need something? Come here and see if you can get it. Well, but I'm the backstop at the end, and I'm going to keep this budget balanced as long as I'm around here if I can."
In the budget revision, Brown maintains his proposal to increase funding for the University of California and California State University systems by as much as 20 percent over four years, and he proposes a statewide approach - not a county-by-county effort - to implement California's expansion of Medi-Cal under the federal health care overhaul.
In other program areas, Brown's budget revision would:
• Abandon the governor's January proposal to cap the number of state-subsidized classes that public university students can take. Brown had proposed the idea as a way to make the University of California and California State University systems more efficient, but he said Tuesday that the proposal required "more time."
• Allocate $15.4 million to expand the use of prison fire camps to help ease prison crowding. The administration is also proposing to let counties ship some long-term offenders to state prisons in return for taking an equal number of short-term offenders from prison. The measure is designed to address complaints by local officials about California's prison realignment, the 2011 law in which the state shifted responsibility for certain low-level offenders from the prison and parole system to counties.
• Loan the state general fund $500 million from California's cap-and-trade program, money designated to reduce greenhouse gas emissions. Environmental advocates opposed the loan, while the administration said it is appropriate because state agencies need more time to develop greenhouse gas-reduction programs.
Highlights of Gov. Jerry Brown's revised budget proposal for the fiscal year that begins July 1:
• Taxes: Includes an extra $15 billion in revenue through June 2014 due to voter approval of Proposition 30, which increased income taxes on high earners and raised sales taxes.
• K-12 schools: Spending on schools would grow by about $1 billion over two years to $55.3 billion for the new fiscal year. It also provides $1 billion for schools to implement Common Core standards and about $1.9 billion that would be allocated under Brown's proposed "local control" formula.
• School energy: Provides half of Proposition 39 funding – $450 million this year – to school energy efficiency projects outlined in the ballot measure that closed a tax loophole for out-of-state companies.
• Courts: Proposes a $200 million cut that would delay additional courthouse construction projects for up to a year.
• State workers: Assumes size of state workforce will remain flat, but includes money for previously approved salary increases. No new salary increases or furlough days are anticipated.
• Child care: Proposes no new state funds for various subsidized child care programs beyond adjustments for caseload. smf: Brown refuses to differentiate between child care and early childhood ed/pre-school programs.
• Higher education: Proposes an average 10 percent general fund increase to CSU, UC and community colleges. No fee increases are envisioned through 2016-17.
• Medi-Cal: Proposes to permanently impose a tax on managed care plans using the state sales tax rate starting in 2013-14, saving the state $343 million. Estimates that federal changes to Medicaid will cost the state about $208 million extra in 2013-14.
• Welfare: Continues major changes from last year that created a two-year time limit for adults to get cash grants and work assistance, but provides an extra $142 million to expand county-run employment services and case management. Provides an additional $48 million to identify potential employment barriers for individuals and subsidize employers who hire welfare recipients.
• In-home care: Proposes to spend $200 million more based on new projections that more people will be certified for care than once thought. Budget incorporates lawsuit settlement that reduced from 20 percent to 8 percent a cut in providers' hours and wages.
Fiscal prudence-and short sight, may result in worsening of oral health for California's most vulnerable
by email from the center for Oral Health | http://bit.ly/10YFoEV
Yesterday, Governor Jerry Brown announced his May Revision of the California State Budget, declaring for the first time in decades a multi-year balanced budget. In his brief remarks unveiling the proposal, the Governor highlighted the work to implement the Patient Protection and Affordable Care Act (ACA). But he continues to deny dental care for millions of Californians.
In 2009, budget deficits prompted California lawmakers to eliminate adult Denti-Cal benefits to reduce public spending by nearly $109 million. However for next fiscal year California is expecting a $3 billion surplus. Despite the surplus, Governor Brown's revision of the State Budget continues cuts to Medi-Cal funds for dental care and worsens Medi-Cal provider rates, which would make it harder for nearly 3 million low-income Californians that rely on Medi-Cal to get the care they need.
To the eyes of many, over the past three years, California has taken a leading role in implementing ACA. Under the ACA, millions of Californians will gain access to affordable coverage beginning in January 2014 through a new health insurance marketplace called Covered California. In addition, more than 1 million low-income Californians will be newly eligible for Medi-Cal under a program expansion that state policymakers have said they will adopt. The federal government will pay 100 percent of the cost of this expansion from 2014 to 2016, gradually reducing the federal share to a still-high 90 percent of the cost by 2020.
- But Governor Brown's inaction regarding dental benefits will prevent the State from bringing in the one-to-one federal matching dollars authorized by ACA.
- Furthermore, his lack of understanding of oral health may result in increased utilization of costly emergency room services for dental care denied to Californians.
- By continuing the neglect to the oral health federal funding will not come into our state, not helping families get the care they need, not improving our health system, and dampening California's economic recovery.
The Budget includes provider rate reductions enacted through Chapter 3, Statutes of 2011 (AB 97). These reductions will result in General Fund cuts of $488.4 million in 2013-14. It also includes decreases for MRMIB (a cut of $143.9 million General Fund from the Budget Act of 2012). This significant decrease is primarily due to the transition of Healthy Families Program beneficiaries to Medi-Cal.
The expectation is that the California Legislature will pass an adjusted budget on time, by June 15. Thus, the next four weeks are crucial for the implementation of the Affordable Care Act, the future of the Medi-Cal program, the state's commitment to the remaining uninsured, and more.
The Center for Oral Health will continue to provide updates on this topic in the upcoming weeks.
Strong support for Governor Brown's LCFF. Equity delayed is equity denied our youth are counting on us
9:10 AM - 15 May 13 · Details