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Assembly Demos urge $8B budget reserve

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POSTED December 11, 2013 8:39 p.m.

SACRAMENTO . (AP) — Assembly Speaker John Perez pledged Wednesday to cautiously begin restoring funding to some social programs that were slashed during the recession and said lawmakers will ask voters to approve a revised rainy day fund on the November 2014 ballot.

Having a voter-mandated savings plan and building an $8 billion budget reserve by 2017 would protect the state from future "slashes and cuts" like those that devastated state programs in recent years, said Perez, D-Los Angeles.

The combination would "finally bring an end to the spend-and-slash roller coaster budgets that we've seen for the last 20 years," he said.

Perez said other priorities for his members include encouraging creation of jobs, preventing tuition increases for higher education, fighting poverty, possibly with an expansion of the federal earned income tax credit, and phasing in pre-school programs including universal transitional kindergarten for 4-year-olds.

The plan outlined by Perez on behalf of his Democratic members is the opening salvo in a budget debate expected to last until June.

Gov. Jerry Brown, a Democrat, will propose his budget next month and revise his projections in May. Spokesman H.D. Palmer said the governor's priorities will be paying down long-term debt and building a budget reserve with the state's anticipated surplus, which is partly a result of temporary increases in sales and income taxes approved by voters last year before conditions began improving.

The state's independent legislative analyst last month projected annual operating surpluses approaching $10 billion a year by the 2017-18 fiscal year if current spending and revenue policies continue.

Republican legislative leaders have also urged financial prudence and paying down the billions of dollars owed to state pension funds and retiree health care. They have objected to Perez's proposal to change the rainy day fund ballot measure negotiated by former Gov. Arnold Schwarzenegger and his fellow Republican lawmakers three years ago. Democrats shifted that Republican proposal, originally slated for the June 2012 primary, to the November 2014 general election.

With budget surpluses forecast for the first time in several years, many groups will be seeking funding for their interests next year. On Wednesday, a group of environmental and local government groups called on Brown to pay back about $500 million that was diverted to the general fund this year from the state's cap-and-trade fund, which is intended to help reduce greenhouse gas emissions.

Brown "has actually talked a lot about the urgency of addressing climate change and we agree with him on that. Now we need him to put our money where his mouth is," said Bill Magavern, policy director at Coalition for Clean Air.

 

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