Jerry Brown

California Gov. Jerry Brown

By Chris Megerian
June 14, 2015

The Legislature is expected to approve a budget Monday that bets on California’s economy to continue growing and sets the stage for higher state spending in coming years.

The plan, which is not supported by Gov. Jerry Brown, includes $749 million more in discretionary spending than the governor has proposed. And because some of the increases would be phased in over time, those additional costs in future years would be $1.2 billion or more.

For example, a boost in payments to disabled residents would start halfway through the fiscal year and cost $66 million in the next budget. The full cost of the proposal, however, would be $132 million annually.

“You’re putting the camel’s nose into the tent here,” said Mike Genest, who served as Gov. Arnold Schwarzenegger’s finance director. “And we know the rest of the camel is coming in.”

The ruling Democrats said their budget makes crucial investments in government programs for needy Californians, and they reject concerns from Republicans and the governor that their proposed spending would reach unsustainable levels.

“You have reserves in the case that you’ve miscalculated,” said Assembly Speaker Toni Atkins (D-San Diego).

Under state law, legislators have until midnight to approve a spending plan — or their pay stops. A new budget is required to take effect July 1, and negotiations between Brown and lawmakers have been ongoing.

Democratic lawmakers built their budget plan on revenue estimates from nonpartisan legislative analysts that are higher than projections from the Brown administration. Although the governor has allowed some additional spending in previous years, he has always insisted on using his lower revenue targets, even as tax receipts outpace his numbers.

“It’s a dialogue,” Atkins said. “We have to make our case.”

Brown has been reluctant to commit to more spending because California’s income is notoriously unpredictable. In addition, the state still faces hundreds of billions of dollars in long-term costs for retirement benefits and overdue road maintenance.

“When you spend today, you’re really paving the way for massive cuts tomorrow,” the governor told business leaders last month. “The better path is stable, careful, sustainable budgeting, and that’s what we’re going to have.”
It’s a dialogue. We have to make our case. – Toni Atkins, Assembly speaker (D-San Diego)

Some financial analysts have urged lawmakers to accept Brown’s approach. Gabriel Petek, who tracks California finances at the Wall Street ratings agency Standard & Poor’s, said higher spending would likely make the state budget “more precarious.”

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