California took a big step forward last week when Governor Jerry Brown proposed a $96.7 billion balanced budget for 2013-2014. After a decade of accounting gimmicks and deficit spending that have masked our states financial problems, the proposed budget requires us to live within our means, pays down debt, and puts our state on the path to fiscal stability.
For the first time since 2007, California is in a position to operate without a deficit. This remarkable turnaround is made possible by a growing economy, voter-approved temporary tax increases and much welcome fiscal prudence built into the budget that aligns expenditures with revenues, sustains past budget cuts and creates a $1 billion reserve to weather the changing economic climate.
Overall General Fund spending is projected to grow by 5 percent, from $93 billion in 2012-13 to $97.7 billion in fiscal 2013-14. Total revenues and transfers are estimated to reach $98.5 billion. Debt is projected to shrink from $27.8 billion to $4.3 billion over the next four years.
Although we are always concerned over the economic impact of tax increases, the passage of Chamber-supported Proposition 30 allows California to increase its investment in education. Funding for K-12 and community colleges will increase by $2.7 billion next year and $19 billion by 2016-17. Funding for California State University (CSU) and the University of California (UC) will also increase 5 percent. Such investments will go a long way in helping to prepare more students for college and career and increase the affordability of higher education for deserving students.
The Governor’s proposed weighted student formula for school funding should have a positive budget impact for the San Francisco Unified School District (SFUSD). The Chamber will watch legislation on health insurance implementation and Enterprise Zone reform related to the budget.Governor Brown deserves great credit for putting forth a budget plan that will help keep our state on a path toward economic recovery and fiscal stability. As the budget makes its way through the Legislature in the coming months, there will be many pressures to restore funding to programs that have been cut in recent years. But this will only kick the can further down the road, and bring us back to a status quo of decline and uncertainty.
The Chamber applauds Governor Brown and we urge lawmakers to keep in the spirit of fiscal discipline that will keep California golden for years to come.