Gov. Jerry Brown’s reward for guiding the state budget out of its recession abyss is a swelling surplus that lawmakers are prepping to fight to spend over the next month.
He’s scheduled to release his final 2018-19 budget proposal Friday morning. All indications are that it’s even sunnier than the draft he published in January when he projected a $6 billion surplus.
How good is it?
Tax collections are up about $3.8 billion above what Brown anticipated in January, according to the State Controller’s Office.
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It’s an irresistible pot of money for lawmakers who want to bolster programs for the homeless, higher education and lower-income families. The question is whether they'll be able to get Brown to open up the piggy bank.
The governor "will argue that this is a one-time scenario, so he will argue for one-time expenditures," said Chris Hoene, executive director of the California Budget and Policy Center. "Even within those realities there are opportunities to make some significant investments."
Brown has maintained a cautious tone about spending all year, warning that the state is overdue for a recession. His initial budget proposal would have put $5 billion into the state’s rainy day fund over the next year, giving California a $13.5 billion cushion if a recession hits.
He suggested at a water conference Thursday that he wants to hold the line against additional spending. California's budget depends on income tax paid by high-earners, and the state's revenue can swing by as much as 20 percent in down years.
“Most people who come to Sacramento want more. If you add up all the mores, we’re totally bankrupt,” Brown said at the conference, according to The Associated Press.
Here's a look at some of the proposals that could become friction points before the Legislature's adoption of a final budget next month:
Homelessness: A group of big city mayors is asking Gov. Brown to free up about $1.5 billion for grants that would help them fight homelessness in their communities. Sacramento Mayor Darrell Steinberg is among the leaders lobbying for the money. Assembly Budget Committee Chairman Phil Ting, D-San Francisco, also supports the proposal.
Health care: Assembly leaders want to spend about $1 billion expanding access to health care in the state. They want to help lower-income families buy insurance, offer more services to undocumented immigrants and expand Medi-Cal.
Higher education: Brown's January budget proposal gave the University of California and California State University systems a 3 percent boost in funding. Both systems are lobbying for more money and have friendly legislators making their case. The UC is asking for another $105 million in ongoing funding; the CSU wants another $171 million.
CalWORKS: Senate Budget Committee Chairwoman Holly Mitchell, D-Los Angeles, wants to increase funding for a welfare program that offers cash assistance for poor families with children. She's proposing that the state establish a minimum grant amount. A bill she wrote outlining her proposal does not have a cost estimate, but lobbyists and legislative staff expect her to push for funding.
Mother Nature: Brown on Wednesday signed an executive order freeing up more resources to manage forests, intending to reduce wildfire risks. His order allocates another $96 million for forest thinning and watershed management. Other lawmakers want to spend more money on firefighting resources.
Schools: Schools are not anticipating significant changes in their funding from Brown's January budget. Brown proposed boosting their funding by about $3 billion. Since then, the Department of Education determined that student enrollment declined this year, making it unlikely that the state would give additional money to K-12 schools.
Gray clouds: California leaders still don't fully understand how the tax cuts President Donald Trump signed into law late last year will play out over time. That uncertainty might reinforce Brown's inclination to save rather than spend.
"The bottom line is we need to be careful and responsible, not profligate," said Sen. Jim Nielsen of Red Bluff, the senior-ranking Republican on the Senate Budget Committee.