Jerry Brown releases revised budget to close $16-billion gap
May 14, 2012 | 10:06am - Los Angeles Times
Gov. Jerry Brown today released a $91-billion budget proposal that sharply
cuts health and welfare spending, reduces state payrolls by 5% and freezes
construction of new courthouses.
Brown's revised budget reflects a steadily worsening fiscal picture for
California. On Saturday, he announced via YouTube that the state's deficit had
grown to $16 billion, nearly twice what he projected when he released his
initial budget proposal in January.
The gap grew, the budget revision states, because Brown over-estimated
tax revenues by $4.3 billion and the federal government and courts blocked $1.7
billion in cuts the state wanted to make. The remainder of the difference
reflects an increase in the amount of money the state is mandated to spend on
education under a complex voter-approved formula.
To close the wider gap, Brown has heightened the cuts he wants to make to
Medi-Cal, to $1.2 billion, and maintained another $1.2 billion in welfare and
child-care savings he proposed in January.
He also wants to slash payments to people who care for the disabled by 7% and
reduce the state payroll through a shorter workweek or wage concessions. He
proposed $500 million in cuts to the state's struggling court system, including
a one-year freeze on all new construction projects.
The service reductions are expected to be harsher if voters in November
reject Brown's proposed combination of a sales tax hike and increased levies on
high earners. The governor presumes that $8.5 billion of the state's $16-billion
deficit will be filled by his tax measure. If it fails, he would levy an
automatic $5.5-billion cut to public schools, along with ending popular programs
such as lifeguards at state beaches.
The situation would be worse were it not for Facebook. The budget presumes
the social media company's IPO will kick $1.5 billion in tax revenues into the
state's coffers by the end of the fiscal year in June 2013.
The release of the detailed budget revision, a much-anticipated spring ritual
in the capital, kicks off the budget season in earnest. The Legislature has
little more than a month to pass a budget by the June 15 deadline.