California Governor Signs State Budget

SACRAMENTO, Calif. (CN) –  Promising to increase California’s rainy-day fund along with major boosts to transportation infrastructure spending, Gov. Jerry Brown on Tuesday signed a $183-billion spending plan.

Brown approved the Golden State’s largest-ever spending plan without making any vetoes to the budget bill sent to him by lawmakers on June 16. The bill accelerates nearly $3 billion in infrastructure spending, stashes $1.8 billion to the state’s burgeoning rainy day fund and increases education spending over last year’s budget by $3.1 billion.

The fourth-term Democratic governor says the spending plan is aimed at preparing California for future recession through “fiscal prudence.”

“California is taking decisive action by enacting a balanced state budget,” said Brown in a statement. “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.”

The signing comes 11 days after Brown and the Legislature agreed to the bill, which includes $125 billion in general fund expenditures, an increase of nearly $4 billion over the current budget. It expands the state’s Earned Income Tax Credit by making an estimated 1.5 million low-income households eligible for the state-subsidized employment credit.

For the first time in six years, tuition rates will rise at both the University of California and California State University systems. The budget reflects a total of $15.3 billion in higher education spending, including special and bond funds.

The budget also dedicates $711 million to Medi-Cal from revenues generated by the state’s voter-approved tax hike on tobacco products.  The Medi-Cal boosts come after state Republicans argued during the budget process that the state’s majority party was attempting to violate Proposition 56 by diverting money from the tobacco tax away from health care.

Additionally, the budget calls for a $6.5-million increase to the state’s Department of Justice in order to fill 31 new positions requested by Attorney General Xavier Becerra. It also dedicates $100 million for the implementation of new recreational and medical marijuana laws.

The budget is not all about increase, however, as evidenced by its gutting of the state’s troubled Board of Equalization. In response to a scathing March audit that found the tax collector squandered millions of dollars in tax revenues, Brown and lawmakers are creating a new department overseen by the governor’s office to do the board’s job.

Chair of the Assembly Budget Committee Assemblyman Phil Ting, D-San Francisco, painted the budget as an “expression of California values during a strange and scary time in our nation.”

“We are fighting poverty, standing up for immigrants, and rebuilding our infrastructure,” Ting said in a statement.

As usual, the general fund budget relies heavily on personal income taxes and predicts a 6.8 percent increase for a total of $88.8 billion in revenue. The state budget has routinely been passed on time under Brown following voters’ approval of a 2010 measure that suspends lawmakers’ pay during budget delays.

Brown and the Legislature are still in the process of debating and passing a series of budget “trailer bills” that are not subject to the state’s July 1 budget deadline. The often-controversial trailer bills are budget add-ons that typically aren’t heard in policy committees like regular bills. The bills require just a simple majority, take effect immediately once signed and can’t be overturned at the polls.

During the current legislative session, state Democrats have used trailer bills to pass a gun-control measure and to tweak the state’s recall regulations.


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