SAN FRANCISCO Dec 11 Democrats who control
California's Assembly said on Wednesday their priorities for the
next state budget include more spending on early childhood and
higher education and leaving $2 billion in reserve at the end of
the next fiscal year.
The plan suggests they would like to tap much of the state's
expected surpluses and comes as Governor Jerry Brown, a
Democrat, prepares his initial budget plan for the 2014-2015
fiscal year beginning next July. He will present his plan to the
legislature next month, followed by a revised plan in May.
After the state's budget watchdog agency last month
projected a $5.6 billion reserve for California's next fiscal
year if the state's finances improve and its current fiscal
policies do not change, Brown urged lawmakers to be cautious in
calling for spending increases.
California is seeing a budget surplus after years of
deficits following austerity measures and tax increases approved
by voters last year.
The tax increases included a hike in the personal income tax
rate of the state's wealthiest taxpayers, which is benefiting
state coffers thanks to a strong stock market.
Brown has said the state should be using revenue from the
wealthy's capital gains prudently, notably for building reserves
and paying down debt. Brown's spokesman for budget matters said
those two goals are guiding his budget planning.
Outlining the budget priorities of Assembly Democrats,
Speaker John Perez said in a statement that he expects to work
with Brown and other top lawmakers to have a budget deal for the
2014-2015 fiscal year in place by the legislature's June 15,
Assembly Democrats did not detail how much in increased
spending they would seek for the next fiscal year. But they
projected their budget blueprint would build reserves and
produce an $8 billion reserve in the state's fiscal 2016-2017
The Assembly Democrats' blueprint "makes prudent use of
one-time funds," Assemblywoman Nancy Skinner, chair of her
chamber's budget committee, said in a statement.
California's budget watchdog agency last month recommended
the state leaders prepare for the next economic downturn by
setting aside money to establish an $8 billion reserve by
2016-2017. The agency also urged paying down unfunded retirement
liabilities at the state's pension funds for teachers and
California could end its current fiscal year with a reserve
of $2.4 billion due to stronger than expected revenue from
income derived from capital gains, instead of the $1.1 billion
projected in its current budget, according to the Legislative
Analyst's Office, which tracks the state's finances.
The state controller's office said on Tuesday that state
revenues since the start of the current fiscal year through
November were $228.1 million ahead of projection in the budget.