Editorials

Amid plenty, Brown should not forget the poor

Gov. Jerry Brown discusses the volatility of state funding during the release of his initial budget in January. The projected state surplus is at $4 billion and rising this year.
Gov. Jerry Brown discusses the volatility of state funding during the release of his initial budget in January. The projected state surplus is at $4 billion and rising this year. The Associated Press

California’s economy continues to grow at a healthy clip, and that growth is generating record tax revenue for the state treasury.

The steady climb of the stock market and the rebounding real estate market also have been kind to California-based investors, and the state is getting its share of that income as well.

Personal income tax collections for April were about 25 percent larger than a year ago, and far greater even than Gov. Jerry Brown estimated when he released his proposed budget just four months ago.

It now looks as if revenue in the budget year that ends June 30 will be about $4 billion greater than expected, and possibly more than that.

The improving economy will likely mean higher tax collections in the year ahead, though they cannot be expected to keep growing at their current rate.

And that’s a key point for lawmakers and the public to consider as Brown prepares to release his revised budget this week.

The trick will be to balance the short-term needs of state-funded programs and the people who depend on them with the need to be prudent about the future.

California has a history of roller-coaster revenue, with tax collections climbing fast during good times and then flattening out just as quickly when the economy stalls. That’s why the state has suffered through a series of budget crises since the 1990s as governors and legislators have been forced to cut services whose costs were growing faster than the revenue needed to pay for them.

Complicating things this time around will be the requirements of Proposition 98, the voter-approved constitutional amendment that dictates school spending. That provision, if followed strictly, likely will require that nearly all of the new revenue coming into the budget be spent on kindergarten through community college education.

Brown has been wise to insist on a go-slow approach to spending as the economy has recovered. The governor has tried to focus on repaying debt, making good on the state’s obligations to local government, and prepaying commitments to public employee health and retirement benefits. He also is trying to build a reserve to guard against a future economic downturn.

All of these moves will serve the state well. But as he revises his budget and lawmakers enter into final negotiations over the spending plan, we would like to see the governor give more attention to the needs of lower-income and middle-income Californians.

He should consider restoring some of the health and welfare programs cut during the last recession and investing more in prevention programs that can keep Californians healthy. Brown also needs to find a way to avoid the tuition increase planned by the University of California.

Each of these things would require at least a modest increase in spending, and it looks as though the state will have the money to do that. But Brown also should look for creative ways to interpret the Proposition 98 mandate in order to free up some more money for non-education programs without increasing total state spending.

These are good times for California, and tax collections reflect that. This is as good a time as any to ensure that the least fortunate among us get the help they need to get by in this expensive state, and that all the children and young people of California have a chance to join in the state’s economic success.

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