Brown Introduces Challenging Budget
Governor Jerry Brown released a balanced state budget today (January 10) that slashes spending by $12.5 billion, including an 8 to 10 percent cut in take-home pay for most state employees, and proposes a "vast and historic" restructuring of government operations.
Brown's budget also calls for temporary continuation of taxes while the state pays off debt, moves forward with his realignment plan and consolidates or eliminates functions.
The Governor said his realignment plan will return decisions and authority to cities, counties and schools and "allow government at all levels to focus on core functions and become more efficient and less expensive" by reducing duplication of services and administrative costs.
The one area of state spending spared from cuts is kindergarten through 12th grade education.
Brown's budget proposes total spending of $127.4 billion for the 2011-12 fiscal year. Of this amount, proposed General Fund spending is $84.6 billion.
Brown's budget proposes $12.5 billion in spending reductions, $12 billion in revenue extensions and modifications, $1.9 billion in other solutions to close the gap and provide for a $1 billion reserve.
Major spending reductions include:
� $1.7 billion to Medi-Cal
�$1.5 billion to California's welfare-to-work program (CalWORKs)
� $750 million to the Department of Developmental Services
� $500 million to the University of California
� $500 million to California State University
� $308 million for a 10 percent reduction in take-home pay for state employees not currently covered under collective bargaining agreements.
Brown also plans to trim state government operations by $200 million through a variety of actions, including reorganizations, consolidations and other efficiencies.
The Governor's spending plan proposes additional reductions throughout state government, including corrections, the judiciary and resources.
The budget also proposes to change the role that state and local governments play in local development activities by eliminating state tax benefits for enterprise zones and phasing out the current funding mechanism for redevelopment agencies. This will result in billions in property tax revenues to schools, cities and counties and help pay for public safety, education and other services.
The revenue component of the budget calls for an election this coming June where voters will be asked to continue current personal income and sales taxes, as well as the Vehicle License Fee rate, for five years.
Brown said revenue from the sales tax and the vehicle license fee will be transferred directly to local governments to finance the first phase of his realignment plan.
Brown's budget also requires all corporations to use a single sales factor when measuring income attributable to California and calls for an amnesty program for taxpayers who have avoided or underreported income owed to the state.
California Department of Food and Agriculture
The California Department of Food and Agriculture (CDFA) protects and promotes California's agriculture industry and ensures that only safe and quality food reaches the consumer. The CDFA's existing budget includes $95.8 million in General Fund for a number of programs, such as agricultural plant and animal health, pest prevention, weights and measures, and others. The CDFA also receives $32 million for support of the network of California fairs (78 fairs that also generate support revenues). Beginning in 2009-10, legislation removed funding from horse racing revenue that had previously helped to support the fairs and required $32 million General Fund annually for support of the fairs.
The significant General Fund solutions are as follows:
Given the state's fiscal challenges and the benefits derived by local and private entities, the Secretary of Food and Agriculture will convene key agricultural and industry individuals to look at the long-term viability of state programs and to determine solutions to limit the need for General Fund resources. The consortium will need to complete its work by February 1, 2011, with an expected result of a General Fund savings of $15 million in 2011-12, and $30 million ongoing.
Eliminate General Fund support for the Network of California Fairs - A permanent decrease of $32 million as a result of removing state funding for support of the fairs.
Department of Pesticide Regulation
The Department of Pesticide Regulation protects public health and the environment by regulating all aspects of the sale and use of pesticides and by promoting reduced risk pest management strategies. The Department ensures compliance with pesticide laws and regulations through its oversight of County Agricultural Commissioners, who enforce pesticide laws at the local level.
The significant Non-General Fund policy issue adjustment is:
The Budget includes $2.6 million from the Department of Pesticide Regulation Fund for enhanced analytical chemistry analyses and equipment at the Department of Food and Agriculture.
State Water Resources Control Board
The State Water Resources Control Board (Water Board) and the nine Regional Water Quality Control Boards (Regional Boards) preserve and enhance the quality of California water resources and ensure proper allocation and effective use.
The significant General Fund solution is:
Fund Shifts - The Budget proposes an ongoing General Fund reduction of $12.8 million and a corresponding increase in the Waste Discharge Permit Fund and Water Rights Fund, with proposed statutory changes to authorize the State Water Resources Control Board to assess a fee for basin planning activities. The federal Clean Water Act requires basin plans to facilitate the discharge permit development pursuant to state and federal law.
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