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Governor Jerry Brown Releases Revised State Budget

By Nicole Wong

California Governor Jerry Brown released his revised plan for the state budget last Thursday, May 11. The revision provides funding for schools and child care and improvements for the state’s transportation system, among other things..

Universities and community colleges will continue to receive annual General Fund growth. The plan also prevents financial aid reductions for low-income students. However, in response to a recent state audit report, which found that the UC Office of the President had secreted $175 million in undisclosed funds, the revision includes plans to withhold $50 million from the UC system until changes are made.

According the the revised budget, funding for K-12 schools will increase by $4,058 per student in 2017-2018 over the 2011-2012 amount. Funding is mainly focused on schools with low-income students, English learners and students in foster care. The May revision also gets rid of the deferral of funding included in the original budget plan released in January.

The January budget included a one-year delay on reimbursement rate increases to child care providers because of a lower-than-expected General Fund revenue growth projection. The revision provides a plan to restore this funding.

On the issue of transportation, the May revision reports that Californians spend $762 annually on average in vehicle repair costs caused by poorly maintained roads. This spring, the Legislature and Governor voted to pass the Road Repair and Accountability Act of 2017 which provides $54 billion in funding over the next ten years. The first $2.8 billion will be used to focus on fixing neighborhood roads and state highways, improving public transit and matching locally generated funds for high-priority transportation projects. The revision also allows state and local governments to implement the Road Repair act effectively without delay.

Despite the increased funding, the budget summary still stressed that the California’s budget “is considerably more constrained than in any year since 2012.” It also revisited the issue that recent actions taken by the federal government could have a detrimental effect on California health care.

“The repeal of the Affordable Care Act passed by the House of Representatives in early May would cost the state an estimated $4.3 billion in lost federal funds in 2020, increasing to $18.6 billion by 2027 (with a General Fund impact of $3.3 billion in 2020, increasing to $13 billion in 2027). Such a massive cost shift to the state would necessitate major spending cuts and threaten the health care of the 5 million Californians who have gained coverage in recent years.”

The January budget planned to put 10 percent of tax revenues into the state’s Rainy Day Fund. It was expected to have a balance of $7.9 billion by the end of the year. The May revision estimates $8.5 billion by the end of the year.

The complete budget is set to be enacted in June after approval from the Legislature and the Governor.