CSAC Reacts to Governor’s May Revision
New Budget Proposes to Fully Fund Mandate Repayments
Governor Jerry Brown released his May Revision to the state budget today saying that while revenue is far greater than expected from his January budget, most of the money is constitutionally earmarked for K-12 education and the state’s rainy day fund set aside for lean years. Brown noted that the economy is still precarious. “I don’t want to get caught in the jaws of fiscal instability,” he said.
Despite that, the budget proposal has grown in some areas—and the Governor notes the proposal is one third larger than then the budget at the bottom of the recession several years ago. There is some good news for California counties.
CSAC’s Budget Revision Analysis
Matt Cate Discusses the Budget Proposal
Because of the increase in state revenue, the Governor is proposing to fully fund repayment of the pre-2004 mandates. These are funds the state should have paid on an annual basis for services it required from local governments. During lean budget years the payments were suspended.
The Governor’s January budget proposed paying down that debt by $533 million—the May Revision proposes to fully fund the repayment—totaling $765 million. Seventy-seven percent of that amount will be allocated to counties and the rest to cities and special districts that also had unfunded mandates.
The May revision also proposes to spend an additional $2.2 billion on drought relief, in the form of water supply and conservation programs and emergency response to drought conditions.
One area of concern for counties remains the lack of focus on funding for maintaining local streets, roads and bridges. Cities and counties have a funding shortfall of $80 billion dollars over the next decade for maintenance alone and that gap will only get worse without new revenue. There are some solid legislative proposals to address this. CSAC plans to continue working with the Administration and the Legislature on this critical issue to ensure a comprehensive investment into both the local and state transportation systems
See CSAC’s news release on the May Revision here, our day-one analysis of the May Revision here, and the Governor’s news release here.