Revenue spike may fuel budget battle between Brown, progressives

The November forecast, conducted by the Legislative Analyst’s Office, of state revenue running $7.5 billion higher than expected in 2018-19 has set the stage for perhaps the most pitched budget fight between Gov. Jerry Brown and the Legislature since Brown returned to the governor’s office in 2011.

Progressive Democrats in both the state Assembly and Senate are eager to broadly expand public services. Brown, however, has spent his second go-around as governor emphasizing the dubiousness of adding permanent new spending programs when state revenue is so volatile because of its dependence on income and capital gains taxes paid by the very wealthy.

The governor warns that even a moderate recession could lead to a loss of $55 billion in revenue over three years. Given that revenue plunged $30 billion in one year at the start of the Great Recession, the memories of the budget carnage under Gov. Arnold Schwarzenegger are fresh, especially the huge cuts in K-12 education spending.

But the California Nurses Association and its legislative allies are signalling they’re ready for another full-on push for a single-payer health care system. Assembly Speaker Anthony Rendon, D-Lakewood, continues to ask proponents how such a system could be funded, given that its estimated annual cost of $400 billion is more than triple the state’s current general fund budget of $125 billion. He effectively killed Senate Bill 562, the CNA-backed single-payer measure, last session, perturbed that advocates refused to offer clear explanations of how it would be funded.

Universal free preschool, health care for undocumented sought

The next most costly initiative on the table is a long-discussed proposal to provide universal free preschool to 4-year-olds. Many Democrats share former Assembly Speaker Darrell Steinberg’s view that it should be first on the list of any new state programs. Steinberg’s 2014 proposal would have cost an estimated $2.5 billion a year. More recently, the Common Sense nonprofit advocacy group has been lobbying for a more ambitious program than Steinberg’s with a price-tag of at least $5 billion a year.

Assembly Budget Committee Chairman Phil Ting, D-San Francisco – the lawmaker who so far has issued the most comprehensive proposed budget – wants to spend $4.3 billion of the $7.5 billion in additional revenue expected by the LAO, with the remainder going to the state’s rainy-day fund.

Ting’s most notable proposal is to provide Medi-Cal health care to undocumented immigrants up to age 19, at an annual cost of about $1 billion after smaller initial outlays. He also wants to increase college scholarships, restore cost-of-living increases for state benefits going to the aged, blind and disabled, and increase access to child care. Ting’s plan also calls for an expansion of preschool, but with a plan that’s less far-reaching than Steinberg’s proposal.

Under the California Constitution, the governor must present a budget for the fiscal year starting July 1 by Jan. 10. In May, after the state Department of Finance updates its revenue and expenditure forecasts, the governor’s office issues a revised budget.

Brown made few concessions during the last budget cycle. In May, he ignored the then-loud push for a dramatic expansion of state health care, but he did agree to increase salaries for child care providers and to continue funding a joint state-counties program meant to ease access to health services for seniors and low-income families.

5 comments

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  1. Dallas
    Dallas 2 January, 2018, 09:52

    If “stupid rich, tomorrow never comes thinking” of political class handled their personal finances like they do the public finances, they would die as bag people on the side of the road.

    Reply this comment
  2. Bruce
    Bruce 2 January, 2018, 10:48

    Free universal preschool. My kids have long grown up and I paid for their preschool. Now the commies/socialist want to steal from me and give to another. Bye-bye.
    How about not spending this surplus?

    Reply this comment
  3. Dc1
    Dc1 4 January, 2018, 14:06

    It’s pretty sad that the only thing not being talked about is giving back some of the money to the people who paid it. Nothing else should be discussed imo… But the real fact is that this money won’t be sustained.

    Reply this comment
    • elwin9
      elwin9 20 January, 2018, 14:58

      The greed of the People’s Republic of California ruling class is only matched by their corruption. Giving money back will never happen.

      Reply this comment
  4. Dot
    Dot 5 January, 2018, 15:32

    Why want California Victim Compensation Board us crime victims our money, I been trying for five years now to get my money that I paid out my pocket for my medications and others have also they telling lies and saying my med has nothing to do with my accident my leg was blown off in 6-29-1993 the meds I take is for anxiety And depression, However come hell or high water I’m hanging in there for all of us, not just me need my money we all do, and believe me I understand why you all giving up, not me somebody have to fight for us all and I don’t mind, my GOD BLESS YOU ALL,

    Reply this comment

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Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

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