Dan Walters

By Dan Walters
dwalters@sacbee.com
January 7, 2016 12:08 PM

  • Brown proposes $170.7 billion budget
  • Governor warns of new recession
  • Tells legislators to curb spending plans

Gov. Jerry Brown, warning that “the next recession is getting closer,” doubled down Thursday on holding down state spending and building reserves.

While proposing a $170.7 billion state budget for the 2016-17 fiscal year that begins on July 1, Brown stressed that the plan would continue to fill the rainy-day fund that voters, at his behest, adopted in 2014 as a buffer against a future economic downturn.

“During a moderate recession, revenue losses to the general fund could easily top $55 billion over three years,” Brown said in his cover letter to legislators, urging them to avoid “short-sighted” commitments and make “fiscal restraint … the order of the day.”

He even implied that he would oppose a pending ballot measure, sponsored by unions and other pro-spending groups, to extend temporary income tax increases on the wealthy. Brown said it contains a “fatal flaw” of exempting its revenue from the rainy-day fund requirements.

Money has been pouring into the state treasury – primarily income taxes on the state’s most affluent. The Legislature’s own budget adviser, Mac Taylor, has projected $3.6 billion in unanticipated extra revenue this year.

Brown’s fellow Democrats in the Legislature have many proposals to increase spending on health, welfare and education services. While he has been enthusiastic about K-12 school spending and building reserves, he’s been skeptical about expanding the health and welfare services that legislators favor, or the pre-kindergarten education they also want.

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