Good News at Last in California Budget

     SACRAMENTO, Calif. (CN) - California's fiscal health has improved enough for Gov. Jerry Brown to propose $6.3 billion more in spending next year, with much of it going to schools.
     Brown's $97.6 billion general fund budget pitch, released Thursday, represents a 7 percent increase in spending over last year. He claims the plan wipes out years of deficits and even includes an $850 million surplus.
     "California today is poised to achieve something that has eluded us for more than a decade: a budget that lives within its means, now and for many years to come," Brown told reporters outside the state capitol building.
     He noted that California's budget shortfall stood at nearly $27 billion when he took office two years ago.
     Brown praised both the Legislature for two years of deep cuts and California voters, who passed a series of tax increases last November.
     "The budget cuts made in the last two years and the passage of Proposition 30 make it possible to both live within our means and to increase funding for education," Brown said.
     More than half of the earmarks in Brown's proposal - topping $56 billion - is directed to K-12 education, and the governor promises to repay $1.8 billion taken from schools during the economic downturn. He hopes to achieve this, and an additional $19 billion in education funding by 2016, through a revamped plan that focuses on decision-making and spending at the district level.
     California's public colleges and universities will see an extra $250 million under Brown's plan. Funding levels for the University of California system nevertheless remain 19 percent lower compared with 2008, while the California State University system has taken a 21 percent dip since then.
     Brown called on UC, CSU and community-college leaders to shorten the "time to degree" for students as a way to reduce the drag of higher education on state coffers. His budget mandates caps on the number of units a student may accrue, requiring those who exceed the unit cap to pay the full cost of education rather than subsidized tuition rates.
     Much of California's second-largest expenditure - health care - is in a state of flux in Brown's budget while waiting for guidance on President Barack Obama's Patient Protection and Affordable Care Act.
     While the new budget increases Medi-Cal funding by almost 4 percent, Brown acknowledged most of this will go to pay for anticipated increases in Medi-Cal recipients as Obamacare rolls out.
     Meanwhile California's trial court system, already battered by the budgetary ax several times since 2008, gets another chopping in Brown's budget.
     The plan calls for the elimination of $200 million from the judiciary's immediate and critical needs account. This means further delays in all but the most critical courthouse construction projects.
     Brown acknowledged in the outline that by 2014-15, the courts' reserves will be mostly exhausted. Trial courts will have to make "permanent changes to achieve roughly $200 million in savings needed to achieve structural balance," he said.
     While more revenue and an improving economy buoys California's budgetary outlook for the near future, Brown had a warning for the Legislature, now controlled by a Democratic supermajority in both houses. California still faces "a wall of debt" that must be paid down and urged them to control spending, he said.
     "Fiscal discipline is not the enemy of democratic governance, but rather its fundamental predicate," Brown said. "In fact, it is through fiscal discipline that this budget can invest in education, expand health care and provide a safety net for the most vulnerable."
     "I'm determined to avoid the fiscal mess that the last few governors had to deal with," he added. "The way you avoid it is by holding the line, by exercising a common sense approach to how we spend our money."
     Brown's plan now goes to the Legislature, though he will release a revised version in May after income tax return start coming in. Lawmakers have until June 15 to send their own version of the budget to the governor for approval.