Jerry Brown
Gov. Jerry Brown uses a chart to explain his budget a year ago. He presents his first 2015-16 budget Friday. (Randall Benton – Sacramento Bee file)

By Jim Miller and David Siders
jmiller@sacbee.com
01/09/2015 – 12:13 AM

Gov. Jerry Brown plans to propose a $113.3 billion general fund state budget Friday that holds fast in response to the University of California’s threat to raise tuition unless the state gives the university system more money.

The budget includes the same, modest annual funding increase – $120 million – that Brown has previously proposed for UC, on the condition that tuition remain flat, a source said.

The California State University system, which has not threatened a tuition increase, is also expected to receive a $120 million budget increase, as well as $25 million in one-time money to help with degree completion efforts.

K-14 education is the big winner in the plan, with Brown expected to propose an increase of about $8 billion, including $1 billion for community colleges, the source said.
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The response to UC’s tuition proposal comes in a budget plan that formally opens months of budget talks at the Capitol. The spending plan comes four days after Brown was sworn in for a historic fourth term and includes ongoing funding for high-speed rail and California’s expanding Medi-Cal program, while increasing reserves and paying down debt.

The spending plan is expected to reopen a persistent conflict between Brown and the Democratic-controlled Legislature over how much money to spend on health and human services programs cut during the recession. Brown’s budget includes more money to cover increased caseloads, but no significant spending for new social service programs.

The state’s fiscal situation has improved markedly since the depths of the recession that took hold in 2008. The budget assumes a $4 billion increase in revenue through June 2016, according to a source.

The Brown administration has said the governor’s budget plan will include a proposal to reduce California’s nearly $72billion in unfunded retiree health obligations. The budget proposal was described by the source as a call to bargain with labor unions to reduce costs.

In addition, Brown said in his State of the State address Monday that cities and counties will soon get $533 million toward paying off unreimbursed state mandates. That is more than double recent estimates.

Brown also called Monday for more money for road improvements, though it is unclear how extensively he will address that proposal Friday or if it will take shape over the coming weeks and months.

The budget proposal will include $2.4 billion from the newly approved Proposition 2, half for the rainy-day fund and half to pay down debt. The rainy-day fund would total $2.8 billion by June 2016.

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