Governor Brown Unveils 2016-17 State Budget Proposal

Governor Brown Unveils 2016-17 State Budget Proposal

Sacramento

Governor Jerry Brown

Governor Jerry Brown

California Governor Jerry Brown has proposed a 122.6 billion dollar budget plan for fiscal year 2016-17. The proposal makes significant increases in funding for education, health care and the state’s infrastructure. At the same time the proposal adds to the state’s Rainy Day Fund while also continuing to pay down the state’s debts and liabilities.

The budget includes a significant increase in per student spending for grades K through 12—an increase of nearly $3,600 over 2011-12 levels. The budget provides a fourth-year investment of more than 2.8 billion dollars in the Brown’s Local Control Funding Formula which focuses on students with the greatest challenges to success. This will bring the formula to 95 percent implementation.

The budget also proposes a 1.6 billion dollar early education block grant that combines three existing programs to promote local flexibility. The proposed grant will also focus on disadvantaged students and improved accountability.

The non-profit organization, Students First, has commended the governor for his increase in student funding and applauded the near-full implementation of the governor’s landmark Local Control Funding Formula for the schools; but, cautioned how recent reports seem to indicate the funding may be failing to achieve its intended purpose because in some instances it has failed to reach the students or programs it is intended to assist.

From a different perspective, the President of the California Teachers Association (CTA), Eric Heins said, “It’s been nearly four years since voters passed Proposition 30 to pay back schools and colleges the $50 billion lost during the recession.” According to Heins, while his members are beginning to see Proposition 30 funds restore art, music and PE programs, reduce class sizes, hire more counselors and nurses, prioritize student learning over testing, and make it easier to attend a California college, he cautioned the publication, Education Week Quality Counts Report, had just ranked California, “46th in the nation in per pupil funding.”

In regards to the cost of higher education, Brown’s proposed budget keeps tuition rates at 2011-12 levels for another year for schools in both the state’s University of California system as well as for those in the California State University system.

Brown’s proposed budget also includes a cost-of-living increase for the aged, blind and disabled Californians who participate in the Supplemental Security Income/State Supplemental Payment (SSI/SSP) program. This will be the first state increase in grant levels since 2006.

Assembly-member Cheryl Brown who represents California’s 47th Assembly District and also chairs the House Committee on Aging and Long-Term Care, expressed some concern the proposed budget does not make the cost of living adjustment permanent. “As the cost of living increases in California so should the grants that prevent our most vulnerable residents from living in poverty,” she asserted. “One thousand Californians will turn 65 every day for the next 12 years. “Our state will not continue to experience economic growth if we do not properly plan for this future demographic shift,” she concluded.

In addition, Brown’s budget proposal secures funding for Health Care. The managed care tax set to expire at the end of this year is a critical component of the state’s financing for health care. For this reason, the budget includes a tax reform package that offers a replacement, managed care organization tax for three years. It also provides a net reduction in taxes paid by the private health care industry; secures funding for General Fund Medi-Cal expenses; and, provides an opportunity for targeted rate increases for developmental disability services.

The transportation portion of the proposed budget, originally outlined last summer, recommends a much needed 36 billion dollars over the next decade to improve maintenance of the state’s highways and roads; expand public transportation; and, improve critical trade routes. The budget proposal includes over 800 million dollars for critical maintenance that has been deferred at levees, state parks, universities, community colleges, prisons, state hospitals and other state facilities. However, there is broad criticism related to the allocation of funding for prisons since the state has reportedly reduced its prison population significantly since 2011.

Not surprisingly, the budget includes funding for climate change initiatives that support the administration’s actions to reduce greenhouse gas emissions through programs that support clean transportation, reduce short-lived climate pollutants, protect natural ecosystems and benefit disadvantaged communities.

In addition, Brown’s budget proposal reflects an increase in the state’s minimum wage to ten dollars per hour effective January 1 and provides 380 million dollars for the second year of the state’s Earned Income Tax Credit (CalEITC), a program designed to help the state’s working poor.

Finally, the governor proposed making a supplemental deposit of two billion dollars to the state’s Rainy Day Fund. The deposit will boost the fund’s balance from 37 percent to 65 percent of its constitutional target. When Governor Brown took office in January, 2011, the state faced a deficit of more than 26 billion dollars and estimated annual shortfalls of approximately 20 billion dollars. The deficits, allowed to build up over a decade, were ultimately eliminated under his stewardship. In light of this accomplishment, Brown’s budget letter to the legislature urged continued fiscal restraint.

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