Capitol Alert

California budget plan stays largely same for health, social services

Gov. Jerry Brown unveils his 2015-16 state budget proposal at the Capitol in Sacramento on Friday.
Gov. Jerry Brown unveils his 2015-16 state budget proposal at the Capitol in Sacramento on Friday.

Even as anti-poverty activists organized protests around the state, Gov. Jerry Brown released a spending plan Friday that would restore few recession-era spending cuts to social services.

Brown instead called for restraint, including paying down long-term debt and increasing California’s budget reserves. Public schools stand to receive billions of new dollars under the state’s school funding guarantee.

The budget plan’s release follows robust revenue growth in California in recent months, and Democratic lawmakers are expected to push Brown for more spending in upcoming negotiations at the Capitol.

“We have a carefully balanced budget, more precarious than I’d like, but it is balanced,” Brown told reporters as he presented the $164.7 billion budget and its $113.3 billion general fund.

Four days after being sworn in for a historic fourth term, Brown, a relatively moderate Democrat, called for continued “discipline and prudence” in state spending.

“It’s not a time for exuberant overkill in our budget spending,” he said.

Despite a major push for more funding by the University of California, Brown held steady on an already-promised $120 million increase, demanding tuition remain flat and adding a new string to the allocation – a cap on nonresident enrollment.

Out-of-state and foreign students, who pay additional fees, generate hundreds of millions of dollars for UC annually, but their rapidly growing presence has generated controversy among parents of California students who feel they are being displaced.

Brown inserted a provision in UC’s proposed appropriation that the university should not increase nonresident enrollment in 2015-16.

“The University of California is created by the people of California,” Brown said. “Yes, it’s good to have some foreign students and some out-of-state people, but I don’t think that should be a financial mechanism. It should be more the intellectual environment of the school.”

UC has argued that it needs additional money to expand enrollment and cover rising retirement costs. In a statement, UC President Janet Napolitano said she was “disappointed” in Brown’s proposal.

Learn About Tableau

Advocates for the poor organized rallies in Los Angeles, San Francisco and other cities, arguing that California should do more to reduce poverty and income inequality. Earlier this week, the president of the 900,000-member Courage Campaign said Brown’s budget agenda has heavily favored the wealthy since he returned to the statehouse in 2011.

Anthony Wright, executive director of Health Access California, complained that the budget “largely continues the cuts that were made in the recession to health and human services.”

For more than a year, Brown has been criticized by Republicans and Democrats alike for a poverty rate that remains the highest in the nation when adjusted for the cost of living.

On Friday, Brown said the state does spend a lot on poor people and that income inequality is a force of capitalism outside of his control.

“This is an issue that is part of America, it’s part of the structure of modern individualism, capitalism, stratification – it’s there,” he said.

In response, Sen. Holly Mitchell, D-Los Angeles, said it was only four days ago that she watched Brown, in his inaugural address, call for sweeping measures to address climate change.

That, too, is a global phenomenon, and Brown has championed environmental causes from his perch in California for decades.

Mitchell said it is “frankly beyond me” how Brown can propose far-reaching carbon-reduction measures “and not understand that the state can play an equally critical and pivotal role in setting stretch goals for itself to reduce the number of kids in California who live in poverty.”

Brown’s plan continues funding for overtime pay for in-home service care providers included in the current budget. It also reflects the continuation of a 5 percent increase in welfare-to-work grants, effective April 1.

It includes a $29 million increase, 1 percent, in the state’s share of the monthly grants for blind, disabled and senior-citizen participants in the state-federal supplemental income program. Lawmakers cut the state’s share by a quarter during the depths of recession in 2010, and the state’s involvement in the program has shrunk more since then.

“We saw the boom and the bust, and I’m trying to avoid that,” Brown said. “You can never say that people don’t need money. Most of the money is going for good. But if all you do is hand out goods, it is bad.”

Brown contended that his plan includes more help for low-income residents. He pointed to the plan’s expansion of Medi-Cal, the state-federal health insurance program for the poor, to cover 12.2 million people, an increase primarily driven by the federal Affordable Care Act.

California’s portion of monthly cash grants to poor and disabled seniors has fallen since the economic recession, and advocates for the elderly believe Brown isn’t doing enough to help with expenses. “He doesn’t live that life,” said Diana Madoshi of the California Alliance for Retired Americans.

“It is complex when you are looking at the whole (state budget),” she added. “However, the poverty level for a number of seniors – 1 in 5 in our state – that’s pretty bad. That’s pretty shabby. And the attitude from some (in) California (is), ‘You deserve it,’ or, ‘There’s something wrong.’ Our society seems not to value seniors; not to value people with disabilities.”

Mike Herald, a lobbyist for the Western Center on Law and Poverty, said Brown’s spending proposals amount to just the first step in a long budgeting process.

“I think the governor knows that the legislative leadership is very committed to addressing poverty issues, and I think he intends to make them negotiate for that in the budget process,” he said. “As we’ve seen in recent budgets, at the end of the day, we have gotten some increases and we have gotten some funding back in June.”

Brown has made concessions in previous budgets, but he has largely kept his own proposals intact.

On Friday, he proposed nearly $8 billion in new funding for K-12 schools and community colleges, while increasing funding for the state’s rainy-day fund to a total of $2.8 billion by June 2016. He ruled out tapping any of the new reserve or debt-payment money to pay down the state’s retiree health care obligations.

“I want to build up the rainy-day fund,” he said. “I want to use it sparingly.”

The budget proposal will frame months of talks between Brown and lawmakers before the adoption of a spending plan for the budget year that starts July 1. Unlike in some recent years, Brown’s plan reflected more bullish revenue estimates than the nonpartisan Legislative Analyst’s Office. That could help smooth the path to a final agreement with lawmakers in June.

“The things that are going to be the topic of conversation are safety net programs, things like CalWORKs, all of those issues we have continued to try and chip away at year by year as we get increased revenues.” said Assembly Speaker Toni Atkins, D-San Diego.

She said Brown “knows that this is a dance that we start today and we’re going to be dancing for a couple months together, we’re going to be talking.”

On the Republican side, Senate Minority Leader Bob Huff of Diamond Bar said Brown’s spending plan is “a good budget to start from.”

His fear is less Brown than his Democratic colleagues.

Huff said “the biggest challenge we will face is to keep the legislative Democrats from building an unsustainable budget that ramps up over the years.”

Call David Siders, Bee Capitol Bureau, (916) 321-1215. Follow him on Twitter @davidsiders. Christopher Cadelago and Alexei Koseff of The Bee Capitol Bureau contributed to this report

Related stories from Sacramento Bee