Last week, as California Governor Jerry Brown penned his approval of the state’s 2017-18 budget he said, “California is taking decisive action by enacting a balanced state budget.”
In early June, the governor and key legislators announced they had reached an agreement on the budget proposal. So it came as no surprise when the Governor professed the budget to be “balanced and on time.”
According to Brown, “This budget provides money to repair our roads and bridges, pay down debt, invest in schools, fund the earned income tax credit, and provide Medi-Cal health care for millions of Californians.”
Among other inclusions, the budget will add $1.8 billion to the state’s Rainy-Day Fund, bringing the fund’s total to $8.5 billion in 2017-18, 66 percent of the constitutional target. However, continued threats from Washington to cut Medicaid funding and other programs still leave California in a state of fiscal uncertainty.
The budget also includes expansion of California’s Earned Income Tax Credit, which is certain to provide support for working families and self-employed parents. The expansion makes a million additional households eligible to claim the credit.
The budget will accelerate $2.8 billion toward improving commutes, fixing roads, building mass transit, and strengthening overpasses and bridges.
Further, the budget reaffirmed California’s commitment to funding Medi-Cal, which will include new funding from Proposition 56 (the Tobacco Tax).
The ongoing effort to reduce pension liabilities will be aided by supplemental payments to the California Public Employee’s Retirement System (CalPERS), with a loan from the Surplus Money Investment Fund. This process alone is expected to save taxpayers approximately $11 billion over the next two decades, while also reducing unfunded liabilities and helping to stabilize state contribution rates. This approach will help California achieve savings and reduce liabilities without the cost or risk of external borrowing.
When the agreement was announced, President Pro Tempore Kevin de Leon said, “This state budget will keep California strong, protect our fiscal stability, and empower our communities at a time when Washington is determined to undermine them. This budget makes historic investments in healthcare, education, and childcare, and lays down a multi-billion-dollar investment to start fixing our roads and infrastructure.”
De Leon concluded, “This is how government works—by the people and for the people.”