Capitol Alert Breaking

Gov. Brown signs on-time budget, giving his re-election campaign a boost

The state budget that Gov. Jerry Brown signed Friday came as one of the earliest and rancor-free in recent history.

It contained nearly everything Brown wanted, including a reserve account and money for high-speed rail, and within minutes of its approval Brown was using it to promote his re-election.

The budget’s passage, Brown said at a signing ceremony in San Diego, showed “your government is working.” Brown promised to guard reserves if re-elected, and he suggested any budgetary shortcomings – Brown was asked about unfunded retiree health care liabilities – could be addressed in his next term.

“I can’t do everything in one year, or even four years,” the third-term Democrat said. “That’s one of the reasons why I’m running for another four years. But have no doubt, the same achievements and progress we’ve made in these four years will happen in the next four years, and we’ll tackle the retiree health.”

For Brown, who holds advantages in campaign fundraising and public opinion polls, a budget that appeared only four years ago to overwhelm his administration has become a measure of its success.

The economy has improved, Brown persuaded voters to pass a tax increase initiative in 2012, and California, after years of deficits, is now restoring some services cut during the recession.

“This guy is looking to a lot of people like a genius,” said Larry Gerston, a political science professor at San Jose State University. “He’s in the catbird seat, and in fairness he worked hard to get California there.”

On Friday, Brown announced a relatively small number of line-item vetoes totaling about $38 million. The majority of that amount consisted of technical fixes to the budget legislation.

Except for in 2009, when lawmakers enacted a budget in February that fell out of balance and had to be reopened three months later, the budget signed Friday was the earliest on record going back nearly 30 years. The $156.3 billion spending plan includes more money for Medi-Cal and welfare-to-work, and $250 million in carbon-reduction funds for California’s $68 billion high-speed rail project.

More significantly to the rail project, the budget promises an ongoing source of funding, with 25 percent of revenue from California’s cap-and-trade program going to the project in future years.

The budget also begins to pay down an estimated shortfall of more than $74 billion in the teachers’ pension fund and puts about $1.6 billion into a special rainy-day fund.

“If you step back from the nitty-gritty of who won what argument and all that, the fact that he’s got a balanced budget, a structurally balanced budget, and now a plan to deal with one of our two biggest unfunded liabilities, I’ve got to just stand up and say, ‘Wow,’ because I never thought this was going to happen,” said Mike Genest, who was former Republican Gov. Arnold Schwarzenegger’s finance director. “You have to give Gov. Brown a great deal of credit for being the adult at the table.”

The budget agreement was a product of negotiations between Brown and legislative Democrats. Minority Republicans approved of Brown’s rainy-day fund measure, but they were otherwise a nonfactor in budget talks.

The election-year spending plan is a dramatic improvement from four years ago, when Brown took office and the state faced a deficit of more than $26 billion. The budget Brown signed in 2011 cut higher education and social services spending, and he authorized additional reductions the following year.

By 2013, however, the outlook had improved. After agreeing to modest spending increases last year, Brown on Friday authorized more money for welfare-to-work, Medi-Cal and an expansion of child care and preschool programs. The budget includes $264 million for new children’s programs, including thousands of additional preschool slots for poor children.

“For the first time in almost a decade we have a budget that actually includes investments that will make a lot of people’s lives brighter,” Assembly Speaker Toni Atkins, D-San Diego, said in a prepared statement. “With this budget that ensures stability and expands opportunity, we have the chance to put the Great Recession even further behind us.”

Republicans said the budget does too little to reduce long-term debt, and they criticized items inserted into budget legislation with little public review. Included in the package is an extension of California’s existing tax credit for new solar energy systems and controversial language capping the amount of money school districts may set aside for economic crises if state-level reserves reach certain levels.

The reserve cap was supported by California’s teachers unions, which want the money available for spending, and Brown did not discount labor’s influence when asked Friday if the measure was a “payoff to the teachers union.”

“Those are strong words,” Brown said. “I would say it’s part of a legislative process where no one gets everything they want, but everybody has enough stake in the outcome that they support the process and the result. And I’m here to get things done, not to engage in theological niceties or perfection, which is not our calling in the political world.”

The budget’s late-hour insertions also included the removal of a requirement that undocumented immigrants applying for driver’s licenses submit affidavits acknowledging they lack Social Security numbers, instead allowing them to simply state their ineligibility on license applications.

Brown, who signed legislation last year granting driver’s licenses to undocumented immigrants, traveled from the budget signing in San Diego to a celebration with Latino lawmakers later Friday in Los Angeles, the state’s largest media market.

Brown’s office said the celebration was “in recognition of legislation signed last year to help workers and immigrants in California,” including the driver’s license bill and a measure raising the state’s minimum wage.

Thad Kousser, a political science professor at University of California, San Diego, said Brown avoided political injury by signing an on-time budget, and he will herald the rainy-day fund in his campaign. But the spending plan also includes openings for Brown’s Republican critics, Kousser said, especially around high-speed rail.

“That certainly does give his opponent something to talk about,” Kousser said.

Brown’s Republican opponent in the governor’s race, Neel Kashkari, did just that on Friday, while guest-hosting “The John and Ken Show” on KFI AM 640 in Los Angeles.

In the studio for hours on the conservative radio program, Kashkari referred repeatedly to Brown’s “crazy train.” He accused Brown of “patting himself on the back” for a budget negotiated “behind closed doors.”

Among Kashkari’s guests was Assemblyman Jeff Gorell, R-Camarillo. He praised Brown for the rainy-day fund and resisting legislative Democrats’ more optimistic revenue estimates.

But the rest of the budget, he said, “leaves a lot to be desired.”

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