SACRAMENTO, Calif. (AP) — Gov. Jerry Brown sees a budget deficit and an urgent need for spending cuts.
Legislative leaders see a surplus with room to comfortably increase expenditures.
Always at odds when it comes to the budget, the Democratic governor and the Democratic Legislature are particularly far apart this year as they embark on six months of spending negotiations amid uncertainty about federal funding under the incoming administration of President-elect Donald Trump.
Brown staked out a conservative opening position Tuesday, warning of a potential $1.6 billion budget deficit and proposing a spending plan that keeps general fund expenditures flat at $122.5 billion. Since costs rise every year, his plan would require cuts to keep pace, and he suggested eliminating billions of dollars allocated to education, state building construction, subsidized housing, college scholarships and child care providers.
He seeks to boost the state’s reserve fund to $7.9 billion — up from $6.7 billion in the current budget year — to help soften what he warned is an inevitable recession after 10 years of economic recovery.
“You’ve got to save your money or you’re going to lose the farm,” Brown said, acknowledging that he expected “some shoving back and forth” with lawmakers as a final budget compromise is negotiated by June.
Democratic legislative leaders gave Brown’s budget a tepid reception. Acknowledging the need for caution in the face of federal uncertainty, they nonetheless rejected Brown’s proposed cuts to college scholarships and child care while insisting they will still push to increase spending on social welfare programs.
“This is not a time to eliminate important programs that lift up the middle class,” Assemblyman Kevin McCarty, D-Sacramento, said in a statement.
Brown said months of lower-than-expected revenue, combined with the likelihood of a recession and the potential for drastic cuts in federal spending, demand restraint.
His projection for a deficit was a stark contrast with the forecast released in November by the Legislature’s nonpartisan budget expert, Legislative Analyst Mac Taylor, who projected a surplus as high as $2.8 billion.
Drawing on that forecast, Assembly Democrats in December called for $1 billion in new spending for things such as expanding the state earned-income tax credit, mandatory full-day kindergarten and reducing college costs.
To maintain current spending, Brown proposes cutting $3.2 billion from future commitments, about half by giving schools and community colleges less than expected. He wants to stop enrolling new college students in the Middle Class Scholarships program, saving more than $30 million, cancel $300 million in upgrades to state buildings and drop a $400 million proposal for affordable housing that the Legislature rejected last year.