The Capitol’s annual budget ritual is entering its final phase this week with an historic twist.
It will be the 16th and last budget for the state’s longest serving governor, Jerry Brown, writing the final chapter of his fiscal record. And it won’t be easy, even though California is, as he said this month, “nearing the longest economic recovery in modern history.”
Ironically, it’s that prosperity, including record-low unemployment and multi-billion-dollar windfalls of state tax revenue, that makes writing Brown’s final budget politically difficult.
Brown sees an $8 billion jump in projected revenues from his initial 2018-19 budget in January, and wants to sock most of it away in reserves to cushion the impact of the inevitable economic downturn.
Quoting pioneer physicist Isaac Newton as he released his revised budget on May 11, Brown told reporters, “What goes up must come down. This is time to save, not to make pricey promises we can’t keep. I said it before and I’ll say it again: Let’s not blow it now.”
The problem is that while Brown wants to save most of the latest windfall, his fellow Democrats in the Legislature yearn to spend.
As a two-house “conference committee” resolves minor issues prior to the June 15 enactment deadline, Brown and legislative leaders will negotiate the biggies, and Assembly Speaker Anthony Rendon and Senate President Pro Tem Toni Atkins have wish lists totaling at least several billion more dollars.
“As we finalize the budget, the Assembly will prioritize investments that expand access and improve affordability in our health care system, and that help cities and counties address the growing homelessness crisis,” Rendon responded to Brown’s revision.
“The budget also must address the needs of CSU and UC students, faculty, and staff. They have made the case for funding to stabilize tuition rates, address rising costs, and enroll more California students. We have heard them.”
Atkins struck a similar note, saying, “We have the rare opportunity to revitalize long-neglected programs for those who need them most, while ensuring that California is financially prepared to weather future economic downturns.”
Chris Hoene, executive director of the left-leaning California Budget Project, captured the Legislature’s desires this way:
“With so many California households struggling to afford the basics, the revised budget’s lack of significant new funding for affordable housing or for subsidized child care and preschool is disappointing. In addition to prioritizing these areas in the final budget, state policymakers also should look to boost CalWORKs (welfare) grants, which have been below the deep-poverty threshold for a decade, increase support for CSU and UC, increase cash assistance for low-income seniors and people living with disabilities, and expand health coverage to undocumented immigrants.”
And how would Democrats spend billions more without, they insist, interfering with Brown’s desire to save more?
They’re leaning on their budget analyst, Mac Taylor, who says the state could have $3.5 billion more in its kitty than Brown projects, thanks to higher projected revenues from continued economic expansion and lower mandatory spending on schools due to enrollment decreases.
If past patterns are any guide, Brown will give a little on spending to help legislators save face with their constituencies that want more money – especially if he can buy them off with some one-time appropriations.
However, he seems dead-set on storing more billions in reserves as a parting gift to his successor, so that when the economy does go south, he will be remembered fondly for his prudence.