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Calfornia Budget Looks Generous for 2014

SACRAMENTO (CN) - A "recovering economy" and bounty from voter-approved tax increases led Gov. Jerry Brown to promise billions to education and debt relief in his $155 billion preliminary budget.

Brown's budget for 2014-15 - which was leaked two days before a planned trifecta of announcements in Sacramento, San Diego and Los Angeles on Friday - includes nearly $107 billion in general fund spending and $44 billion for special funds. Another $4.1 billion will be used to pay off bonds.

Last year, the Legislature approved $96.3 billion in general fund spending. Brown's proposal for next year exceed that figure by nearly 9 percent - a given, since the state's legislative analyst has predicted a $3.2 billion operating surplus when the fiscal year ends in June.

For K-12 education - which accounts for a whopping 42.4 percent of total general fund spending - the state's modest surplus is a windfall. Brown promised to restore all mandated Proposition 98 spending suspended during the dark years of 2008 through 2011.

Total per-pupil spending from all sources in K-12 will reach $12,833 if Brown's budget is passed, an increase of about $850 per student over this year. The proposed budget also enhances the local control funding passed by the Legislature in 2013.

Brown's budget calls for the University of California and California State University systems to receive $26.3 billion, an increase of $1.1 billion over the last budget, and contingent on the regents and trustees holding student tuition steady. Community colleges meanwhile will see an 11.4 percent increase in state spending because of demand and Proposition 98 mandates, which don't apply to the state's university systems.

Despite ongoing uncertainty over the federal Affordable Care Act - which the state is implementing through the Covered California exchange and an expanded Medi-Cal scheme - Brown pledged a total of $118 billion in total funding to the Health and Human Services Agency.

Brown's budget proposal provides a lengthy account of ongoing prison overcrowding battles, and acknowledges that the state will likely miss an April extension to bring the inmate population to 137.5 percent of capacity. But ever the optimist, the governor said he expects to receive another two-year extension from the judicial panel overseeing the state's prison system, and plans to hand the prison system $9.8 billion next year.

The governor also said he will pursue legislation to mandate split sentencing for county jail felons - a combination of jail time and supervised release for nonserious, nonviolent, nonsexual offenders - to alleviate pressure on the corrections system.

Brown refuses to allow his pipe dream of a statewide high-speed rail network to die, despite numerous setbacks in the courts last year. So $250 million of the Department of Transportation's $11 billion budget will go to the High-Speed Rail Authority, which will also get greenhouse-gas cap-and-trade money to plug funding shortfalls that have threatened bond sales for the floundering project.

Despite his own 8.5 percent spending increase and tepid optimism over a capital gains windfall from the currently red-hot but ever volatile stock market, Brown urged lawmakers to exercise fiscal control in the face of revenue not seen in years.

"Given the vagaries of the business cycle, we must be ever vigilant in the commitment of public funds," Brown wrote to legislators in the 271-page budget summary. "In addition, past budgetary borrowing, unfunded retirement obligations, bond costs, and deferred maintenance have created a mountain of long-term liabilities that total hundreds of billions of dollars. In the face of such liabilities, our current budget surplus is rather modest. That is why wisdom and prudence should be the order of the day."

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