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Gov. Brown Releases Plan to Close Whopping Budget Deficit; Watch Today’s Press Conference

| May 14, 2012
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Fans of disaster movies may enjoy Gov. Brown’s press conference on the May budget revise today. (Watch it here.)

The deficit is now officially $15.7 billion, not the roughly $9 billion originally projected. The proposed budget cuts assume passage of Brown’s tax initiative in November, which accounts for $8.5 billion of the plan’s increased revenue. An April PPIC poll found just 54 percent would vote yes on the measure, which needs a two-thirds majority to pass.

If the tax plan doesn’t pass, the cuts would be more severe, including a $5.5-billion cut to public schools.

Brown blamed the substantially larger deficit, which he first announced in a YouTube video on Saturday, on a too-optimistic forecast of revenue coming in from tax receipts; on a mandated increase in school funding due to Prop 98; and on the prevention of some cuts in state health services by the federal government.

Anthony York of the LA Times reports on the cuts being proposed should the tax initiative pass:

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%…He proposed $500 million in cuts to the state’s struggling court system, including a one-year freeze on all new construction projects.

Kevin Yamamura of the Bee reports on other aspects of the plan:

The Democratic governor relies on a patchwork of solutions to bridge the gap in a $91.4 billion general fund spending plan, including deeper cuts, his November tax initiative and taking money from a multi-state mortgage abuse settlement with banks.

Among the most unusual ideas: asking state employees to work four days a week for a total of 38 hours instead of 40, or 9.5-hour shifts. Brown suggested in the budget that the proposal would save operational costs by shutting down offices once a week in addition to 5 percent of salary. The proposal would likely have to be bargained with labor unions since Democratic lawmakers will not impose the cuts unilaterally.

The governor also proposed giving UC $38 million less than he did earlier this year. Both proposals make it more likely that UC will raise tuition in 2012-13 after UC officials said last week they needed an additional $125 million to avoid a 6 percent hike on students.

The plan also takes into account a projected $1.2 billion from the Facebook IPO.

As to the next steps, News10 Sacramento’s political editor, John Myers, weighed in with this last week:

The conventional wisdom under the Capitol dome has been that even though the governor submits a revised plan on Monday, substantive budget action won’t come until after June 5 — the statewide primary election where 100 of the 120 seats in the Legislature are on the ballot. But that would also mean only 10 days until legislators begin forfeiting their salaries without sending a budget to Brown, the wildly popular provision contained in 2010′s Proposition 25.

And keep in mind that last year — the first time Prop 25 was in effect for a budget debate — the deficit lawmakers were asked to erase between mid-May and mid-June was less than $10 billion. This is a far larger task to pull off… and in an election year, to boot.

Let the unhappy games begin…

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10:12 a.m. Someone asks why should we trust these numbers any more than the other numbers, which, obviously, did not hold up by a longshot.

Update: Brown uses word “austerity” in his intro. Urges “modicum of stoicism” and less “indulging your propensity to immediate gratification.”

Capital reporters are already tweeting about the numbers…

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Category: Government, State Budget

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