SAN FRANCISCO Jan 10 California's economy
is on the mend, but Governor Jerry Brown is expected to take a
cautious approach to spending when he unveils his state budget
plan on Thursday.
Brown, a Democrat with a national reputation as a liberal,
plays up his pennypinching in California, and he has repeatedly
stressed the need for spending restraint, even amid signs the
state economy is picking up.
California job growth tops the national average,
unemployment has fallen below double-digit levels for the first
time in nearly four years, and voters in November approved a tax
increase that closed most of the lingering budget gap.
The Legislative Analyst's Office, the state's independent
budget watchdog, says budget surpluses are possible with the
help of steady economic growth, rising stock prices and state
leaders holding down spending, but analysts are more cautious.
"While there is positive news, we think there are a lot of
cautionary points as well that the legislature will want to keep
in mind," said Jason Sisney, a deputy legislative analyst at the
Legislative Analyst's Office.
In November the office projected a state budget gap of $1.9
billion through June 2014. Brown faced a $9 billion gap a year
ago and $25 billion two years ago.
The Department of Finance will make its own financial
projections, the key to calculating any budget hole or surplus,
as part of the budget plan announced on Thursday.
The Sacramento Bee reported on Thursday that Brown will
propose giving more than $2 billion extra to K-12 districts next
school year, quoting sources familiar with the proposal.
Signs of improvement in the state's economy have raised
hopes among some liberals that cuts to healthcare and welfare
programs of the last few years can be rolled back, but Brown is
expected to resist such calls. Democrats won a supermajority in
the legislature in the November vote, giving them the power to
raise taxes without Republican support.
"A large part of the caucus will want to keep its foot on
the brake," said Steve Maviglio, a Democratic consultant and
aide to former Democratic Assembly speakers. "I think the
leadership and the governor are on the same page."
Brown also will issue a State of the State address on
January 24, and he could use either or both speeches to set out
his priorities for the year. The November tax increase was
targeted squarely at avoiding education cuts.
Politicians and analysts say he may outline priorities
including education and environmental regulation reform,
improving water supply reliability and how to complete the
high-speed rail line that is planned to link Los Angeles, San
Francisco and Sacramento.
The governor is due to unveil the plan at 10 a.m. PT (1 pm