Gov. Brown: Big cuts ahead for California's budget

Brown speaks in Sacramento

"We're trying as much as possible to keep us on an even keel", Brown said in reversing his proposed cuts for K-12 schools.

State Sen. Jim Nielsen, R-Gerber, vice chair of the Senate Budget Committee, talks with reporters about California Gov. But Brown has proposed withholding $50 million in funding to the University of California in light of a scathing state audit that found $175 million in hidden reserve funds at UC Office of the President. "No one wants to take that up yet", Brown said. "They're going to have to do penance for it".

The context for Brown's remarks was the release of his new spending plan, which set a record, proposing a record $183.4 in spending, despite some caution.

A moderate recession would drop state revenues by about $20 billion annually for several years, according to the governor's budget document.

The Brown administration says if the American Health Care Act is signed into law, the state could lose $5.4 billion starting in 2019, and that loss could grow to nearly $24 billion in 2026. "Voters were promised that these tax revenues would be used to pay for health care, dental care and education, yet the Governor's plan ignores that and redirects it for other purposes".

Those gains led Brown to include $1.4 billion in his 2017-2018 revised budget to continue to implement the Local Control Funding Formula, with funding directed to districts with low-income students, English learners and students in foster care.

And Brown, flanked by a lurid, red-ink chart depicting California's potential Medi-Cal deficits, said the state would be hard-pressed to cover those cuts.

Also, a one-year delay in increases for child care funding projected last January won't be necessary after all, so the May revision is restoring that funding as part of the $500 million child care package proposed in the 2016 budget.

Republican leaders in the Assembly and Senate said that the finding should serve as a warning to the governor to trim budgetary commitments and begin paring down the state' s debt load. "That is a staggering figure, it would be more than the state spends on higher education and corrections combined".

Among the increases: $1.4 billion more to K-12 schools; $500 million - as promised previous year - for additional subsidized child care; and $400 million to counties to offset the cost of In-Home Supportive Services, which the governor has proposed shifting from the state to the counties. Local officials said their budgets couldn't handle the total extra costs in a single year. "I put that $50 million in there so we can hold their feet to the fire", Brown said. The federal government is contemplating actions - such as defunding health care for millions of Californians, eliminating the deductibility of state taxes and zeroing out funding for organizations like Planned Parenthood - that could send the state budget into turmoil.

Under current law, with the end of the Coordinated Care Initiative, county realignment funds would experience an increase in annual IHSS costs of about $600 million.

Brown had proposed a $122.5 billion budget that kept general fund spending mostly flat.

The Democratic governor asked for an additional $6.5 million to help state Attorney General Xavier Becerra - who Brown appointed - in likely legal confrontations with the federal government.

Brown said the legislation was actually tax break for the wealthy. The constitutional deadline for California to pass a budget is June 15. A stopgap federal spending bill, meanwhile, passed Congress with bipartisan support and maintained existing federal funding for state programs.

"April is usually the state's biggest tax filing month, so lower-than-expected personal income tax receipts are troubling", Yee said in a statement.

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