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Jerry Brown releases revised budget to close $16-billion gap

May 14, 2012 | 10:06 am

Gov. Jerry Brown
Gov. Jerry Brown on Tuesday released a $91-billion budget proposal that sharply cuts health and welfare spending, reduces state payrolls by 5% and freezes construction of new courthouses.

Brown's revised budget reflects a steadily worsening fiscal picture for California. On Saturday, he announced via YouTube that the state's deficit had grown to $16 billion, nearly twice what he projected when he released his initial budget proposal in January.

The gap grew, the budget revision states, because Brown over-estimated tax revenue by $4.3 billion and the federal government and courts blocked $1.7 billion in cuts the state wanted to make. The remainder of the difference reflects an increase in the amount of money the state is mandated to spend on education under a complex voter-approved formula.

To close the wider gap, Brown has heightened the cuts he wants to make to Medi-Cal, to $1.2 billion, and maintained another $1.2 billion in welfare and child-care savings he proposed in January.

He also wants to slash payments to people who care for the disabled by 7% and reduce the state payroll through a shorter work week or wage concessions. He proposed $500 million in cuts to the state's struggling court system, including a one-year freeze on all new construction projects.

The service reductions are expected to be harsher if voters in November reject Brown's proposed combination of a sales tax hike and increased levies on high earners. The governor presumes that $8.5 billion of the state's $16-billion deficit will be filled by his tax measure. If it fails, he would levy an automatic $5.5-billion cut to public schools, along with ending popular programs such as lifeguards at state beaches.

The situation would be worse were it not for Facebook. The budget presumes the social media company's IPO will kick $1.5 billion in tax revenues into the state's coffers by the end of the fiscal year in June 2013.

The release of the detailed budget revision, a much-anticipated spring ritual in the capital, kicks off the budget season in earnest. The Legislature has little more than a month to pass a budget by the June 15 deadline.

RELATED:

California's deficit grows to $16 billion

Jerry Brown targets state workers for cuts

Capitol on edge as Jerry Brown seeks spending cuts, tax hike

-- Nicholas Riccardi in Sacramento

Photo: Gov. Jerry Brown addresses the California Medical Assn. in April. Credit: Rich Pedroncelli / Associated Press

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