California Legislative Analyst Mac Taylor last Friday announced that he believes that the estimated revenue figures in Gov. Jerry Brown's revised state budget plan are low by $3.2 billion. Taylor believes that Brown underestimated the tax revenue expected to come in during the next fiscal year, starting July 1, by $2.8 million and that an extra $400 million will come in between now and July.
The differing numbers set the stage for a battle over how—or whether—to spend the extra cash, but let's first pause to bask in the glow of the moment: The number crunchers in the Legislative Analyst's Office (LAO) are typically the more sober folks at the budget table; there's no reason for the LAO to be recklessly rosy. This is mildly good news.
In the wake of Taylor's announcement, all parties are doing their jobs: Brown is pushing back against the LAO, cautioning that tax revenues are particularly volatile in California and calling for a conservative approach to the budget, which has earned the Democratic governor a rare bit of praise from the minority Republicans in the Legislature, who don't want any expansion of current spending levels. And the majority Democrats want to use the extra projected revenue to bolster programs that have been decimated by years of dramatic spending cuts.
Naturally, we stand with Democrats who want to restore funding for the state's welfare system, childcare, elder care and its court system, which is severely under-funded, and, especially, beef up mental-health services, which we believe would save money in the long run by reducing criminal-justice costs.
Brown's budget is consistent with his longstanding interest in pouring as much money as possible into education. Not only does he seem to genuinely want to spend more on education; he also believes he's required to, under Prop. 98, which mandates a minimum level of education funding. Prop. 98 is the 800-pound gorilla that comes out of the hall closet and plops himself down on the living-room sofa every time education spending is broached; outside of the education community, Prop. 98 is widely viewed as inequitable in terms of overall state budgeting.
Apart from the extra money that Taylor believes will come in, Brown has included several billions of dollars in estimated increased tax revenue, and it's pretty much all going to education. Taylor seems to agree with Brown's view of Prop. 98, saying that $2.4 billion of the $3.2 billion more he thinks the state will have would also have to go to education if it's budgeted.
According to the Sacramento Bee, Taylor doesn't disagree with Brown's hesitance to use tax-revenue-windfall money on ongoing services, but, still, he's proposed that Brown and the Legislature amend Prop. 98 in a way that allows the state to make good on the funding requirements at a slower pace, which would provide greater short-term budgeting flexibility (the state owes education some Prop. 98 money from past years).
Brown won't be engaged in any such discussions, and it's doubtful that many lawmakers will go up against the education establishment, but the impacts of Prop. 98, much like Prop. 13, should be consistently and repeatedly examined in a public manner.
The sad fact is that there's still far too little money available to provide adequate services in California. We can't argue with any plan to spend more on education. But there's more to raising children properly than simply sending money to their schools. Under a new federal measurement, California has the highest poverty rate in the country. According to the Washington, D.C.-based nonprofit Corporation for Enterprise Development, California also fares poorly when it comes to overall family economic security.
For some folks, achieving a balanced budget is the end goal. But the reality is that social services—those that help keep millions of needy Californians afloat—have been decimated amid a five-year-long budget crisis. Rampant poverty and its ripple effects won't do the state's economy any favors in the years ahead. We urge our legislators to keep that in mind when they negotiate and vote on next year's budget.
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