Budget Basics
The Current Situation
On January 10th Governor Jerry Brown released his January
budget proposal for the
2013-14 budget year. The Governor’s Proposed Budget is balanced for the first time in many years, largely as a result of the additional revenues approved by the voters' passage of Proposition 30 on last November's ballot. Specifically, the budget proposes:
- Significant additional funding for schools and community colleges as a result of the requirements of Proposition 98 and a new plan for the allocation of funds to K-12 schools and county offices of education
- An increase in funding for the University of California and the California State University in the hope of avoiding tuition increases at the universities for the next several years. The budget also anticipates that reforms at UC and CSU will lead to more efficient operation, thereby reducing the need for increases in tuition.
- Options for expanding health care for low-income individuals and families through Medi-Cal under federal health care reform
- A multiyear plan to eliminate most of the so-called “wall of debt,” -- budgetary obligations totaling around $30 billion incurred in recent years
With the exception of education funding, the balance of state General Fund spending proposed in the budget reflects a baseline budget, meaning that service levels established in 2012-13 would generally continue “as is” in 2013-14. This means that reductions in many programs made over the last several years would continue in the budget year.
The Legislative Analyst released an overview of the
Governor’s Budget available here.
In March, the Legislature will begin to hold committee hearings on the budget. Proposition 25, which was passed by voters in 2010, changed the 2/3rds vote requirement to pass a budget to a simple majority. However, a 2/3rds vote is still required to increase revenues.
In March, the Legislature will begin to hold committee hearings on the budget. Proposition 25, which was passed by voters in 2010, changed the 2/3rds vote requirement to pass a budget to a simple majority. However, a 2/3rds vote is still required to increase revenues.
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The graph above shows the impact of the recession on the state's General Fund Revenues. It compares a projection of revenues made prior to the recession (orange line) with what actually happened to revenues as a result of the economic downturn.
