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Brown to propose paying down debt

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POSTED January 8, 2014 9:20 p.m.

SACRAMENTO  (AP) — Gov. Jerry Brown's budget for the coming fiscal year calls for an 8.5 percent increase in general fund spending coupled with a dedication to pay down the state's debt by more than $11 billion, according to a copy of the document obtained late Wednesday by The Sacramento Bee.

The budget has a $106.8 billion general fund, including $45.2 billion for K-12 schools. That's an increase of nearly $4 billion in education spending from the current fiscal year.

It says the 2014-15 spending plan also includes repaying $6 billion in payments that have been deferred to schools and $1.6 billion funneled into a rainy day fund.

The state's legislative analyst has forecast that California will have a $3.2 billion operating surplus by the end of the fiscal year, one that is expected to approach $10 billion within three years.

The governor's office said it did not provide the budget document to the Bee and would not provide any details to other news organizations. The Bee posted a copy of the 271-page budget summary to its website.

In his written summary, the Democratic governor notes that the end of the national recession and his voter-approved increases to the state sales tax and income taxes for high-earners helped end a cycle of deep budget deficits, which led to tens of billions of dollars in program cuts since 2008.

But he also urged caution among state lawmakers and a restrained approach to handling the budget surplus.

He said past borrowing, unfunded retirement liabilities, bond debt and deferred maintenance have left a "mountain of long-term liabilities" totally hundreds of billions of dollars for California taxpayers.

"In the face of such liabilities, our current budget surplus is rather modest," the governor wrote in the document. "That is why wisdom and prudence should be the order of the day."

 

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