Gov. Jerry Brown has released the May revision of the 2015-16 California budget, outlining education, debt-relief, drought-relief and High-Speed Rail funds.
Compared to the January budget, the May revision reflects a $6.7 billion increase.
The final 2015-16 California budget is expected to be implemented July 1, 2015.
Brown suggested to increase funding levels for K-12 schools from $47 billion to $53.1 billion, more than $3,000 per student, according to the budget.Rising state revenues can help implement the funds ahead of schedule.
“University tuition almost doubled during the recession, creating a hardship for many students and their families,” according to Brown in the budget.
The May revision adds $38 million in funding to the California State University system for a total of $158 million in new funding. The University of California system will receive temporary funding from Proposition 2 to “assist in paying down UC’s unfunded pension liability.”
“I’m committed to working with (Brown) to make additional investments in education and to pay down government debt, so we don’t saddle our children with the errors of our ways,” said Assemblyman Scott Wilk, R-Santa Clarita. “Although I’m supportive of the additional $5.5 billion to K-14, it needs to be coupled with real reform so we can equip the next generation to compete in a global economy.”
The May revision will also hold tuition rates for California undergraduate students flat through 2016-17.
“California families deserve a budget that prioritizes education, paying down our debts and saving money for a rainy day,” said Senator Sharon Runner, R-Lancaster.
Debt-Relief & Rainy Day Fund
Proposition 2 requires $633 million to be saved in the Rainy Day Fund and an additional $633 million be used to pay down debts and liabilities, according to the budget.
The May revision will move a total of $1.9 billion from Proposition 2 funds to debts and liabilities, according to the budget. By the end of 2015, the Rainy Day Fund will have a balance of $3.5 billion.
“Proposition 2 was designed to help the state save when times are good, such as now,” Brown said in the budget.
By the end of the summer, the state hopes to repay the remaining $1 billion in deferrals to schools and community colleges and make the last payment of the $15 billion in Economic Recovery Bonds dating back to 2002.r
“As co-author of the legislation that produced Proposition 2, the ‘Rainy Day Fund’, I’m pleased the fund will receive $633 million,” Wilk said. “It is important to keep faith with voters and not divert money from the reserve for impulse spending.”
High-Speed Rail Project
“However, I’m concerned the Governor is earmarking $500 million from Cap and Trade funds to finance the High-Speed Rail Project,” Wilk said. “This matter is being litigated and I believe it will be ruled an illegal use of AB 32 funds. It’s time to have an honest discussion of the viability of the ‘train to nowhere’.”
Brown also allotted $500 million to finance the High-Speed Rail Project in the coming year, according to the budget.
“Unfortunately, Governor Brown keeps pursuing the ill-conceived bullet train by alloting $500 million from Cap and Trade funds to high speed rail. I cannot support a budget that continues to dump money into this failing project,” Sharon Runner said. “We need to stand behind budget policies that recognize the importance of private sector growth, education and public safety. The Legislature must resist the temptation to spend one time revenue on questionable programs rather than reducing state debt. I look forward to working with my colleagues on a budget that moves California in the right direction.”
The High-Speed Rail Project is a State project, led by the California High Speed Rail Authority, aims to build a high speed rail system that will connect San Francisco to Los Angeles at speeds up to 200 miles per hour. The local route, which will impact communities along the SR 14 corridor, is planned from Burbank to Palmdale.
Low-income Tax Credit/ Health Care Reform
The budget creates a California Earned Income Tax Credit “to assist the state’s lowest‑income workers,” according to the budget.
About $380 million in benefits to aid 2 million Californians will increase funding for education and health care reform and minimum wage.
“The governor’s low-income tax credit is a step in the right direction in assisting the working class,” Wilk said. “However, we need to be addressing workers’ compensation, tort reform and reducing the regulatory burden so entrepreneurs are willing to invest their capital so we can have true job creation. So far the Governor has been AWOL on these issues. The best social program is a job.”
The state’s first Earned Income Tax Credit will “help the poorest working families in California,” according to the budget.
The credit will provide a refundable tax credit for wages and would focus on the lowest‑income Californians whose household income is less than $6,580 without dependents or $13,870 with three or more dependents.
The proposed credit would provide an average estimated household with $460 annually for about 825,000 families, with a maximum benefit of $2,653, according to the budget. The proposal would also provide $1.4 billion in funding for adult education, career technical education, workforce investment and apprenticeships.
It would also establish an amnesty program for those with past due court‑ordered debt from traffic infractions by 50 percent, reduce the administrative fees from $300 to $50 and have their driver’s licenses reinstated.
“The Governor is right to recognize that much of the money currently pouring into Sacramento is one-time dollars. Whether the Legislature will show similar spending restraint is an open question,” George Runner said. “One thing is clear: given the current revenue windfall, tax increases are off the table. Instead of proposing tax hikes, the Legislature should spend its time ensuring taxpayers receive value for their money.”
The state is in a four-year drought with below-average rain and snow. The snowpack, the source of the one-third of the state’s water is at 2 percent of the normal average.
The May revision adds $2.2 billion to continue the state’s response to drought impacts by protecting and expanding local water supplies, conserving water and responding to emergency conditions.
For more information and updates for the 2015-2016 state budget, visit the website.
“There’s no question government is doing well,” George Runner said. “We now need to make sure the people who fund government with their hard-earned dollars have a chance to prosper too.”