Democratic legislators have counted on a revenue surge to persuade Gov. Jerry Brown to loosen up on spending – but just the opposite is occurring.
Advocates for expanded child care and kindergarten and other services were buoyed when Legislative Analyst Mac Taylor opined that Brown’s overall revenue estimates through the 2017-18 fiscal year were “probably too low.”
However, revenue from April’s all-important income tax filings are counted, and they fell nearly $1 billion below Brown’s expectations for the month, dashing hopes for a windfall.
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“The April result wiped out most of the positive revenue results we observed through March,” Taylor’s office reported.
With revenues for the current fiscal year now tracking the administration’s estimates almost precisely, it’s very doubtful that Brown will loosen up on spending when he reveals his revised 2017-18 budget in a few days.
Rather, he’s likely to continue to dampen legislators’ spending plans, warn again about a long-term revenue decline and urge that reserves be fattened as hedge against recession and/or reductions in federal aid by a Republican White House and Congress.
“The surging tide of revenue increases that we enjoyed the past few years appears to have turned,” Brown warned in his initial budget proposal, adding, “In all likelihood, the coming years will bring even worse financial news – either from the start of the next inevitable recession or from changes at the federal level. This uncertainty about the future makes acting responsibly now even more important.”
The Legislature’s liberal leaders have many spending priorities if the money is available, including expanding the earned income tax credit for low-income Californians, making college less expensive and expanding early childhood services, such as child care and all-day kindergarten.
The latter is a particular priority of Assembly Speaker Anthony Rendon, whose pre-political career was in early childhood services.
As he became speaker last year, Rendon said, “I’m going to make sure it is on the top of the agenda. Our leadership team, through the budget process and in terms of prioritizing bills that go to the governor’s desk, we’ll have a fair amount of power to do something about this.”
Rendon punctuated the priority by appointing a special commission to push the issue, which also has widespread support among educators and children’s advocates.
Brown, however, is going the other way. Although the state spends about $3.8 billion a year on various forms of early childhood services, his January budget cut back slightly on earlier expansion agreements, citing the state’s uncertain revenue picture.
Underscoring Rendon’s push for expansion, the Assembly education budget subcommittee rejected Brown’s reductions and placed full funding, an additional $226 million, back in its version of the budget.
Brown’s “May revise” on Thursday is unlikely to embrace such increases. It will, however, set the stage for a month of private negotiations over a final budget, which has a June 15 deadline for enactment.