Gov. Brown proposes $131.7 billion state budget

Gov. Jerry Brown holds a budget chart as he discusses his proposed 2016-17 state budget at a news conference in Sacramento Calif. The ballooning costs are an issue Brown will face in his final year in office despi

As part of his spending proposal, the budget summary suggested that more information about how LCFF money is allocated and spent by school districts could be required in the next fiscal year.

"The key to this budget is to fill up the rainy day fund", he said.

The state receives 70% of its revenue from income taxes and half of that comes from the top 1%, making the state dependent on capital gains earned in the stock market and resulting in huge revenue swings, Brown said. They could then deduct that from their federal tax bill.

As is his custom, the governor warned of an inevitable economic slowdown. "Let's not blow it now". But it has plenty of reserves available to use if California faces another series disaster, budget director Michael Cohen said.

In May 2011, Governor Brown identified a $35 billion Wall of Debt - an unprecedented level of debts, deferrals and budgetary obligations accumulated over the prior decade. In 2012, he staked his governorship on a tax increase that voters approved that year and reauthorized in 2016. Jerry Brown on Wednesday proposed spending nearly none of it, sticking with his traditionally restrained approach in his final budget.

He's proposing a $190.3 billion spending plan today that accelerates funding for his signature education law and uses new gas tax revenue to fund $4.6 billion in new transportation projects.

The governor's January proposal is an opening gambit in the long march toward a budget that is to be adopted in June, before the July 1 beginning of the fiscal year.

However, he employed that same reasoning of potential volatile budgets to reject returning any of the surplus to voters through tax cuts.

"There is a lot more flexibility than is now assumed by those who discuss the California rule", Brown said. "Taxpayers work hard for their income - we should work just as hard to protect it".

Brown has focused much of his second stint as governor on stabilizing the state's long-term budgeting during a period of fiscal prosperity.

"This is about steady-as-you-go or exuberance followed by pain", said Brown, who is obviously determined to leave the state's fiscal house in better order than the deficit- and debt-riddled situation he inherited from predecessor Arnold Schwarzenegger - or that he bequeathed to successor George Deukmejian in 1983.

California Faculty Association President Jennifer Eagan says that, under the governor's proposal, tens of thousands of qualified students would be turned away every year. The plan had its first hearing Wednesday and would allow taxpayers to give a charitable contribution to the state's coffers in lieu of paying taxes.

Other Democratic-led states, including New Jersey, are considering similar tactics to push back against what their leaders see as an unfair politically motivated move by the Trump administration against blue states. The state's 1st District Court of Appeal held that public agencies could modify pension benefits without offering additional compensation - disregarding the California rule - but the court emphasized that changes to pensions must also be reasonable and that agencies must consider the financial burden they'd place on their workers and retirees if they renege on benefits.

But when Brown was asked if he would tackle changes to Proposition 13 by commenting on a spit roll property tax proposal or other measures that deal with Prop 13, he said, "The fact is there is more property tax collected than ever".

"One thing governors don't like is to be presiding over a hemorrhaging budget because people do blame them", Mr. Brown said he's open to that idea but still has questions.

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