With California income tax revenue running about $4.5 billion ahead of expectations through April, Gov. Jerry Brown finds himself today in an unusual position: Releasing a revised budget proposal highlighting better numbers, not worse.
Nearly all of the additional revenue could be required to go to schools and community colleges under Proposition 98, California's school-funding guarantee. And part of the increase may represent a one-time benefit attributable to wealthy Californians shifting income from 2013 into 2012 to avoid higher federal tax rates, according to the nonpartisan Legislative Analyst's Office.
Brown's proposal will open a month of budget negotiations at the Capitol, with high-stakes wrangling over education policy and the financing of California's social services.
The Democratic governor is pressing for a major overhaul of education funding, seeking to give local school districts greater flexibility in how they spend state money while also directing more money to school districts with relatively high proportions of students who are poor or learning English.
Democratic lawmakers in both houses have expressed conceptual support for the plan, but many lawmakers remain in disagreement with the governor on his proposal to award districts additional money if more than half of their students are low-income or meet other criteria.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, has proposed an alternate way of distributing that money partly on a per-pupil basis for all students and partly on a per-pupil basis for disadvantaged students.
Meanwhile, Brown has called on lawmakers to curb any appetite for additional spending, while the state's improved fiscal outlook has lent momentum to the effort of some Democratic lawmakers and their allies to increase spending on programs for California's poorest and neediest residents. Proposals include a restoration of Medi-Cal dental benefits and increased funding of mental health services, among others.
Though lawmakers have been engaged in budget hearings for weeks, negotiations typically do not begin in earnest until after the May revision.
In an unusual move pre-empting Brown's proposal, Assembly Speaker John A. Pérez last week laid out a budget framework of his own. He is proposing the establishment of a reserve fund to replace a constitutional amendment already on the November 2014 ballot.
Pérez, D-Los Angeles, proposes to set aside money from capital gains taxes in good budget years to finance that account. He is also seeking funding in the budget to lower the cost of college for middle-class students.
Call David Siders, Bee Capitol Bureau, (916) 321-1215. Follow him on Twitter @davidsiders.