Governor Edmund G. Brown Jr. on Wednesday signed a balanced state budget that protects funding for education and public safety while cutting $8 billion from government to close a $15.7 billion deficit and build a reserve of nearly $1 billion.
The budget slashes spending in almost every part of state government and enacts significant welfare reform while increasing funding for K-12 education by 14 percent, pending voter approval of the Governor's initiative.
"This budget reflects tough choices that will help get California back on track," said Governor Brown. "I commend the Legislature for making difficult decisions, especially enacting welfare reform and across-the-board pay cuts. All this lays the foundation for job growth and continuing economic expansion."
The budget assumes voter approval of the Schools and Local Public Safety Protection Act, an initiative placed by Governor Brown on the November ballot.
The initiative will enact temporary increases on high-income earners, raising income taxes by up to three percent on the wealthiest Californians for seven years. It would also increase the state sales tax by one-quarter of one cent for four years. Six billion dollars in additional cuts to education and public safety will be triggered if the initiative fails.
"My revenue proposal is fair and temporary," said Governor Brown. "Our state budget problem was built up over a decade, and it won't be fixed overnight. These temporary increases will ensure funding for our schools until the economy improves."
The budget builds on the significant progress that has been made in tackling the $26.6 billion deficit inherited from the previous administration. Last year's budget slashed $16 billion and shifted California's credit outlook from negative to positive.
Last year's budget cut funding for dozens of state programs, made state government more efficient through consolidation and reorganization and moved government closer to the people through Realignment.
Significant Details of the 2012-2013 State Budget:
Increases Funding for Education
Under this budget, funding for K-12 education and community colleges will receive an increase of 14 percent, subject to voter approval of the Governor's initiative. Funding will increase from $46.9 billion in last year's budget to $53.6 billion this year.
Keeps Higher Education Affordable for Low-Income Students
The budget protects Cal Grants for students attending public universities. To ensure the program is cost-effective, the budget prohibits colleges and universities that are unable to meet minimum performance standards from participating in the program.
Protects Public Safety
The budget continues to fund local governments that are implementing public safety Realignment. It includes a permanent funding structure so that local governments will have a reliable funding source into the future.
Cuts State Employee Compensation Costs
The budget includes a 5 percent cut to state employee compensation for a savings of $800 million.
The budget restores the CalWORKs program's focus on self-sufficiency and employment by establishing a 2-year time limit for parents who are not meeting federal work requirements.
Builds Reserve of Nearly $1 Billion
The budget has a reserve of $948 million to protect the state against unforeseen costs.
Restructures Funds for Trial Courts
The budget restructures trial court funding and reduces General Fund support by $246 million on a one-time basis and requires each trial court to use their available reserves. The budget delays court construction for a savings of $240 million and includes $125 million in ongoing savings.
Reduces Corrections Spending and Implements Long-Term Corrections Solutions
In April 2012, the Brown Administration released a comprehensive plan to save billions of dollars, end federal oversight and improve the prison system. As a result of this plan, the California Department of Corrections and Rehabilitation expects to save $1 billion in 2012-13 and $1.5 billion in 2015-16 while satisfying the U.S. Supreme Court's order to reduce the prison population.
The budget, in full, will be posted at 9:00 AM on Thursday, June 28th at: www.dof.ca.gov.