Capitol Alert

Jerry Brown signs $167 billion California budget, makes no cuts

Gov. Jerry Brown signed the budget bill Monday for the coming fiscal year, fully embracing a package his office played a major role in shaping and making no blue-pencil reductions to individual spending items in the plan.

The governor’s signature came on the final day for him to act on the measure, which the Legislature approved mostly along party lines June 15, along with several related budget trailer bills. The measure calls for $122.5 billion in general fund spending and $44.6 billion in special fund spending, along with $3.6 billion in bond spending.

“This solid budget makes responsible investments in California and sets aside billions of dollars to prepare for the next recession,” Brown said of the plan for the fiscal year beginning Friday.

The budget ends a long-criticized cap on welfare benefits for families that have more children. It also directs an additional $3 billion into the state’s rainy-day reserve, increasing it to $6.7 billion by June 2017.

There also is more money for higher education, higher rates for child care providers and $1.3 billion set aside for new or renovated state office buildings in downtown Sacramento, including the Capitol annex.

Monday’s approval “shows the budget process is working and our final product means California is in stronger fiscal shape than we have been for years,” Assembly Speaker Anthony Rendon, D-Paramount, said.

The lack of any spending vetoes breaks with budget practice. Even when governors and lawmakers agree on a budget pact, Brown and other governors typically veto millions of dollars in spending, sometimes much more. Sometimes the budget agreement has included an agreed upon amount of vetoes – so lawmakers can take credit for approving the spending in the first place and the governor can taking credit for eliminating it.

The last state budget without spending vetoes was in 1982, during Brown’s second term. Before that, the last budget with no vetoes at all was for 1970-71, when Ronald Reagan was governor.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said the absence of line-item vetoes shows “there are no stopgaps in spending. … Apparently the deals have already been cut. And I think they’ve been cut behind closed doors.”

Based on the Brown administration’s latest budget projection, released with the signing Monday, the state will be $4.1 billion in the red in three years. But that accounting assumes voters in November fail to approve an extension of temporary income tax hikes for the wealthy, which would raise an estimated $7 billion a year.

Other related budget measures remain on the Legislature’s to-do list. Both houses have yet to act on natural resources and energy trailer bills, with the resources bill passed by the Assembly differing in some key respects from those advanced in the Senate on Monday. The differences include a ban on killer whales in captivity and changes in how manufacturers of after-market devices for motorcycles get clearance from the California Air Resources Board.

Late Monday afternoon, the state Senate approved legislation allowing the state to borrow $2 billion against the state’s mental health services tax on millionaires to help build affordable housing for the mentally ill. Democrats announced a deal Monday with Assembly Republicans to achieve the necessary two-thirds vote for the plan.

The agreement includes additional money for homeless youth and veterans housing programs. It spells out new rules for oversight of how counties spend the mental health tax money. Media reports and a 2013 state audit noted some counties spent money on activities that included yoga and horseback riding.

The Assembly is expected to vote on the measure Thursday.

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