Governor Jerry Brown May Revise Budget Proposal

Governor's Revised Budget Proposal $1,000 Dollars
Legislative, Judicial, Executive $7,858
Business, Consumer Services & Housing $1,417
Transportation 11,626
Natural Resources 5,039
Environmental Protection 3,342
Health and Human Services 52,541
Corrections and Rehabilitation 13,306
K-12 Education 51,441
Higher Education 14,902
Labor and Workforce Development 895
Government Operations 1,019
Non-Agency Departments 2,777
Tax Relief/Local Government 2,173
Statewide Expenditures 2,391

California Partnership Statement- Governor Jerry Brown May Revise Budget Proposal

Governor Brown’s May Revise budget announcement shows a good start in rebuilding our safety net. California Partnership is glad to hear that California is taking the lead on raising the minimum wage. While the 2016-17 May Revise shows that this year will carry some minor investments in areas like Housing and Education, what remains to be seen is this Governor’s dedication to fighting poverty.

Among the more disappointing aspects of the May Revise is that the Governor seems keen on continuing to tighten belt and putting more and more money into his treasured Rainy Day Fund, regardless of what that means for California’s low-income communities. Governor Brown’s continued insistence on preparing for our next recession by storing more money and making no major investments in critical programs overlooks the fact that while large parts of the state are seeing the benefits of prosperity, many California’s poorest communities are still struggling to stay afloat.

While governor Brown tightens the belt today in order to look forward 3 or 4 years, many have been tightening their belts for years and are still looking to survive the week by week. Fortunately, some people are now just starting to see the effects of the prosperity spurred by California’s 7-year expansion.

And while the state is now using our rhetoric to explain how prosperity in this state is being experienced disproportionately, and how that prosperity must be extended to all, those words must be taken with a grain of salt unless they are backed by serious action.

Instead of taking $250 Million from the general fund for further jail expansion, why not fully fund SSI/SSP, invest in Health4All for Adults, restore the 10% cut on Medi-Cal doctor reimbursements and restore the cuts made to child care?

A 2.76 % increases in SSI/SSP for our disabled community, although a start, is not the help that is required by these people who were forced into and remain in poverty because of the state cuts.

To be a state that has failed to act on a law as archaic and blatantly discriminatory as the Maximum Family Grant Rule calls into question California’s commitment to fighting economic injustice.

While this 2016-2017 May Revise is a good start, it is clear that more is needed to extend California’s prosperity to more than 9 million Californians living in poverty.
Governor Jerry Brown May Revise Budget Proposal shows that Governor Brown is finally starting to hear the voices of the nearly 9 million Californians living in poverty. After a decade of brutal disinvestment in the social safety net, years of shutting out the one quarter of the population living in poverty from the resurging economy.

But now, we need to build on that and turn it into a plan. We need to fully restore the services cut from people struggling every day in California. We need a plan to tear down the wall of poverty. We need a plan that provides child care for every family who needs it so that our parents can contribute to the economy and our children can thrive. We need a plan that provides people with disabilities and seniors the dignity of living in their homes and being cared for by people who are able to make ends meet while doing dignified work. We need a plan that provides quality health coverage to every single Californian, regardless of where they were born or the language they speak. We need a plan that ensures that everyone- from workers making the minimum wage to people who are unable to work and depend on SSI- never have to choose between eating or paying their rent. We need a plan that invests in people, not in prisons or tax breaks for corporations or stowing money away for a rainy day. It is already raining for millions of Californians.

The state has the resources to start that plan today- right now- and begin to build back a state, an economy, and a community that we can all be proud of. Thanks for your efforts to get us this far- we’ve put a chip in the wall. Now, we’ve got to come out swinging, and start to build that state we all deserve.

Our policy advocacy includes expanding the safety net at the state level, putting pressure on the county to continue the Medically Indigent Services Program (MISP) and for county administrators and MISP/DPSS eligibility workers be up to date and informed on current policy. In the past, county presentations on ACA only use the terminology “legal permanent resident” as having access to these programs. In actuality, ACA includes naturalized citizens, legal permanent residents (green card), lawfully present immigrants like temporary protected status and DACA (Medical Expansion in California Only). At the various meetings with the county, our stakeholder group members, which include immigrant leaders, worked to hold county employees accountable of providing this information to the community. In the community we’ll continue to advocate for ACA (Medi-cal Expansion including low income DACA individuals) to continue to provide health care coverage through Medical and Covered CA to immigrants. CAP mission is to work with our partners to engage in state and local budget advocacy to build power and leadership among low-income communities by strengthening our voice and collective power.

As revenues fall short of projections and California stretches into an eighth year of economic recovery, Governor Edmund G. Brown Jr. today released a revised state budget that funds core programs while paying down debt, saving money and holding the line on new obligations.

"The surging tide of revenue has begun to turn," said Governor Brown. "Quoting Aesop's fable of the ant and the grasshopper: 'It is best to prepare for the days of necessity.'"

When Governor Brown took office, the state faced a massive $26.6 billion budget deficit and estimated annual shortfalls of roughly $20 billion. These deficits, built up over a decade, have now been eliminated by a combination of budget cuts, temporary taxes and the recovering economy.

Barring any significant changes, the budget over the next two years remains in balance. However, in the years that follow, the state's commitments will exceed expected revenues with annual shortfalls forecasted to exceed $4 billion by 2019 - or worse with an economic slowdown or recession.

Significant details of the May Revision:

The Challenge of Fiscal Balance

The May Revision revenue forecast has been reduced by $1.9 billion, reflecting poor April income tax receipts and more sluggish sales tax receipts than expected, while Proposition 2's required contributions have been reduced by a combined $1.6 billion. Even if the voters pass an extension of taxes, the longer-term budget outlook would be barely balanced. Until the voters decide in November whether temporary taxes should be extended, the May Revision reflects the principle that no significant new ongoing spending commitments should be made.

Investing in Education

Under the May Revision, the minimum guarantee of funding for K-14 schools is expected to grow to $71.9 billion in 2016-17, an increase of $24.6 billion over the last five years (52 percent). For K-12 schools, funding levels will increase by over $3,600 per student in 2016-17 compared to 2011-12 levels. This reinvestment provides the opportunity to correct historical inequities in school district funding with continued implementation of the Local Control Funding Formula. The May Revision provides $2.9 billion in new funding, bringing the formula's implementation to nearly 96 percent complete.

The Budget also invests in the state's higher education system to maintain the quality and affordability of one of California's greatest strengths. The Budget keeps tuition at 2011-12 levels and commits $25 million in new one-time funding for the California State University to reduce the time it takes a student to successfully complete a degree.

Reducing Housing Costs

Approximately 1.5 million low-income California households pay more than half their income in rent, straining their ability to pay for other essential household expenses. In addition, the state has a disproportionately high share of the nation's homeless and chronically homeless populations. The May Revision reflects $3.2 billion in state and federal funding and award authority for various affordable housing and homelessness programs. This amount includes recently created programs that pay for affordable housing in sustainable communities and housing for veterans.

Local land use permitting and review processes have lengthened the approval process and increased production costs. The May Revision proposes additional legislation requiring ministerial "by right" land use entitlements for multifamily infill housing developments that include affordable housing. This would help constrain development costs, improve the pace of housing production and encourage an increase in housing supply.

The May Revision also endorses a $2 billion bond from a portion of future Proposition 63 mental health revenues, which would enable the Department of Housing and Community Development to develop and administer homelessness and affordable housing programs with a particular focus on chronic homelessness. The May Revision proposes first-year funding of $267 million from the bond proceeds.

Counteracting Poverty

The state has taken historic steps in recent years to assist the state's neediest residents. The implementation of health care reform has increased coverage under Medi-Cal to an additional 6 million Californians in just four years. The Local Control Funding Formula is concentrating the greatest school funding to students with the greatest need. The state guaranteed that 6.5 million workers are eligible for paid sick leave. The 2015 Budget Act created California's first-ever earned income tax credit to help the poorest working families and encourage more families to claim the existing federal credit.

The January Budget proposed the first state cost-of-living increase for Supplemental Security Income/State Supplementary Payment (SSI/SSP) recipients since 2005. In April, the Governor signed legislation that will raise the minimum wage for all workers to $15 per hour as soon as 2023.

Accounting for the full implementation costs, the General Fund has incurred new obligations in the effort to counteract the effects of poverty totaling more than $19 billion (about $10.7 billion of which will be paid for through Proposition 98 funds).

Strengthening Infrastructure

The May Revision continues to reflect the Governor's transportation package that would provide $36 billion over the next decade to improve the maintenance of highways and roads, expand public transit and improve critical trade routes. The increased funding would be coupled with Caltrans efficiencies, streamlined project delivery and accountability measures. The budget also includes $737 million ($500 million General Fund) for critical deferred maintenance at levees, state parks, universities, community colleges, prisons, state hospitals and other state facilities.

Fighting Climate Change

The May Revision supports California's ambitious policies to advance clean energy with a $3.1 billion cap-and-trade expenditure plan that will reduce greenhouse gas emissions through programs that support clean transportation, promote transformational sustainable communities, reduce short-lived climate pollutants and protect natural ecosystems. Over multiple years, the cap-and-trade program gives the state the chance to transform communities - particularly those disadvantaged ones - into innovative, sustainable economic centers.

Best Regards,

Maribel Nunez, Josth Stenner, Erick Lemus, Rosie Flores, Karen Kandamby
California Partnership