Brown Warns of Deep Spending Cuts in Upcoming Budget Plan
During an education-focused budget forum on Tuesday, Gov.-elect Jerry Brown (D) said state residents should brace themselves for deep spending cuts that are expected to be part of the budget plan he will release on Jan. 10, the Contra Costa Times reports (Harmon, Contra Costa Times, 12/14).
California's Fiscal Strain
California faces an estimated deficit of up to $28 billion over the next 18 months, and approximately $20 billion in annual deficits throughÂ fiscalÂ yearÂ 2015-2016 (Mehta, Los Angeles Times, 12/15).
During the forum, Brown attempted to describe the gravity of the state's fiscal situation by outlining how much California would spend on major programs without any cuts. He noted that current annual spending levels are about:
- $17.6 billion for Medi-Cal, California's Medicaid program;
- $9 billion for prisons; and
- $3 billion for CalWORKS, California's welfare-to-work program (Yamamura, "Capitol Alert," Sacramento Bee, 12/14).
Brown also noted that California could be on the hook for as much as $3.5 billion in costs for implementing the federal health reform law. In addition, Brown said the state faces roughly $500 billion in pension liabilities (Palmeri, Bloomberg, 12/15).
Brown's Plan Expected To Include Deep Cuts
People involved in budget meetings say they expect Brown to enact an early-spring budget plan that includes deep spending cuts (Los Angeles Times, 12/15).
During the forum, Brown said, "This is a really huge challenge, unprecedented in my lifetime. I can't promise you there won't be more cuts, because there will be" (Castro, Los Angeles Daily News, 12/14).
Brown also said, "Please sit down if you're reading the stories on the budget on Jan. 10. If you're driving, fasten your seat belt because it's going to be a rough ride" (Contra Costa Times, 12/14).
As part of the spending reductions, Brown said he plans to cut the budget for the governor's office by about 25% (Buchanan, San Francisco Chronicle, 12/15).
State Treasurer Bill Lockyer (D) also weighed in on the need for spending reductions. He said, "It's time to make cuts, I believe deep cuts. I'd do the 25% across the board and just say those who wanted less government, you're going to get your wish. In other communities that are willing to put something on the ballot to make up that difference, they're going to have a higher service level" (Los Angeles Times, 12/15).
During the forum, Brown said he aims to finish work on a state spending plan within 60 days after unveiling a budget proposal on Jan. 10.
The governor-elect's accelerated timeline would allow for a late-spring special election in which voters could decide whether to increase taxes or approve other revenue-generating measures to restore spendingÂ reductions (Los Angeles Times, 12/15).
Headlines and links to broadcast coverage of Brown's budget forum are provided below.
- "Transition of Power: Governor-Elect Brown: Sit Down, Buckle Up for My Budget Plan" (Russ, "KXJZ News," Capital Public Radio, 12/14).
- "Brown Calls State Budget Crisis 'Unprecedented Moment of Reckoning'" (Guzman-Lopez, "KPCC News," KPCC, 12/14).