Capitol Alert Breaking

Excerpts from a chat on California’s budget

The Sacramento Bee's state budget reporter, David Siders, took reader questions about Jerry Brown's budget proposal this week in an online chat. Here are some excerpts from the discussion:

Winners and losers in the budget?

K-12 probably counts itself among the winners. I think high-speed rail proponents are happy with the cap-and-trade allocation. On the other side are social service advocates, who say recession-era cuts remain (and who worry about those cuts becoming a new normal).

(The) economy is expected to be on the uptick. How much more before the governor decides there is enough cushion that he can entertain not being so conservative?

I don’t see much of a political upside to Brown being less conservative. Nobody’s running against him from the left, and he’s still enjoying the narrative nationally that he’s a Democrat operating against type.

(Speaker John A.) Pérez’s Assembly plan seemed to place emphasis on one-time spending vs. ongoing commitments. Does the governor’s budget looks like it tips toward more capital projects or other one-time spending?

A little more than 42 percent of the general fund budget goes to K-12 education. Another 20 percent or so goes to health programs. Higher education gets nearly 12 percent of proposed expenditures, and corrections gets about 9 percent. Those expenses, for the most part, aren’t one-time things, they’re ongoing. But, to the extent we’re talking about new money, it’s relative. Social service advocates say Brown is using too much to pay off debt (a one-time expense), while critics say he isn’t devoting enough attention to long-term liabilities.

How likely is it that the governor will be able to convince the legislature to pay down the Wall of Debt by 2017-2018 as was proposed and what assurances are there to local agencies that have been waiting to be reimbursed out of that $25 billion that this will really happen?

So Brown proposes reducing what he calls the Wall of Debt – or budgetary borrowing – by about $11 billion this year, with full elimination by 2017-18. I think there’s a pretty good chance that much, if not all, of his plan for this year gets done. After all, paying off the school deferrals, which he proposes, is popular with an education constituency lawmakers listen to. His proposal to make early loan payments is probably where he has room to move, if he’s inclined. Keep in mind this doesn’t include what Brown estimates to be $355 billion in long-term liabilities. He acknowledges that will take decades to pay off.

Do you see the increased spending at UC and CSU reducing actual costs for students or will the money go for “other” uses?

Brown’s budget proposal says the funding increase mentioned above is contingent on tuition remaining flat at 2011-12 levels through 2016-17.