State Money Woes Mitigated Under Proposed Budget

Posted by on Jan 16th, 2014 and filed under News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

File photo Education, health care and greenhouse gas reduction programs may get some much needed funding if Gov. Brown’s proposed budget is approved.

File photo
Education, health care and greenhouse gas reduction programs may get some much needed funding if Gov. Brown’s proposed budget is approved.


Gov. Jerry Brown’s third stint as California’s governor has been characterized by efforts to save money, a plan of action that continues with the most recent budget that proposes to set aside money for the state’s Rainy Day Fund. With this new budget, Brown seeks to pay back ever-increasing debt totaling in the billions of dollars, with an estimated elimination of this “wall of debt” by the 2017-18 fiscal year.

Gov. Brown’s inaugural budget followed a similar strategy. Termed the “austerity budget,” the plan intended to pull California out of a $26.6 billion deficit through a series of cuts to various state programs.

The new budget intends to start putting money back into some of those programs, including K-12 education, higher education, health care and the reduction of greenhouse gases. K-12 education will figure prominently in the new budget, with 42.4% of the general fund expenditures going towards education and nearly $5 billion more spent on K-12 education than in 2013-14.

Higher education received the brunt of budget cuts from Brown’s initial budget, but the new budget calls for “investing in higher education,” part of a four-year investment plan that began in 2013-14. This means a $1.1 billion increase in higher education funding this year, as well as 5% increases in funding for the University of California and California State University school systems. Community colleges will also receive an 11.4% increase in funding in 2014-15.

About 25% of the budget will be dedicated to health and human services, much of which is affected by recent federal health care reform. Medi-Cal will be heavily expanded due to estimations that the Medi-Cal caseload will increase by 10.2% from last year and is expected to comprise about 24% of the state’s total population. Adults without children or caretaker relatives will be eligible for Medi-Cal, should they have an income of up to 138% of the Federal Poverty Level.

The Dept. of Social Services, which includes CalWORKS, in-home support services and child welfare, will receive less funding (about $383 million less), but the budget also allocates funds to bolster penalties to improper care and child and adult care facilities, as well as funds for hearings to address and resolve disputes from Medi-Cal and Covered California applicants.

Despite the cuts to social services overall, in-home support services will be receiving a 6.4% increase in funding. Domestic workers will receive overtime pay starting January 2015, per new regulations from the U.S. Dept. of Labor. The budget summary estimates that implementation of these and other labor regulations “will cost $208.9 million in 2014-15.”

Brown’s budget also seeks to make improvements to environmental quality with plans to reduce the state’s greenhouse gas emissions and improve overall water quality. The Cap and Trade Investment Program will place limits on those responsible for the bulk of California’s emissions, with the goal of reducing emissions to the level dictated by the California Global Warming Solutions Act of 2006.

Another part of Brown’s sustainability plan is the establishment of a high-speed rail system, which the budget summary says will cut down on greenhouse gas emissions. The initial segment of the high-speed rail system will cost $250 million.

The Environmental Protection section of the budget will also allocate money for projects in disadvantaged communities. One-hundred million dollars will be dedicated to projects intended to reduce emissions, such as increased public transportation, affordable housing close to public transit stations, preservation of agricultural land and planning that should reduce the number of vehicle miles traveled.

But using the Rainy Day Fund is a primary part of Brown’s plan to offset financial risks and pitfalls such as the deficit he faced upon being elected. A deposit of $1.6 billion will be made into the Rainy Day Fund, while another $1.6 will be used to pay off economic recovery bonds, which were issued to pay off budget deficits from as far back as 10 years. Brown’s plan to pay back debts and liabilities also includes the elimination of deferrals of funds to schools and a plan to make early loan payments, including two immediate payments for transportation loans and Cap and Trade loans.

The budget summary reads, “The Budget proposes a multiyear plan that is balanced, pays off budgetary debt from past years, saves for a rainy day, and makes wise investments in education, the environment, public safety, infrastructure, and California’s extensive safety net.”

A revised budget will be available in May.

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