Where those tax­payer dol­lars will go

The $183.2-bil­lion plan boosts dol­lars in key ar­eas with eye on what Trump may do.

Los Angeles Times - - CALIFORNIA - JOHN MY­ERS john.my­ers@la­times.com

Cal­i­for­nia gov­ern­ment will spend more than ever be­fore un­der the new $183-bil­lion bud­get.

Gov. Jerry Brown on Tues­day signed a $183.2bil­lion state bud­get, a spend­ing plan that boosts public schools and pro­grams aimed at Cal­i­for­nia’s less for­tu­nate while stash­ing away an ad­di­tional $1.8 bil­lion in the state’s longterm cash re­serves.

The bud­get is the first crafted since President Trump’s elec­tion and in­cludes money for a few pro­grams that Democrats in­sisted were a nec­es­sary re­sponse to the chang­ing po­lit­i­cal times. Most notably, it in­cludes $50 mil­lion to pro­vide le­gal ser­vices for im­mi­grants fac­ing de­por­ta­tion.

But it is silent on the big­gest po­ten­tial ef­fect from Repub­li­can con­trol of the White House and Congress — a ma­jor roll­back of fed­eral dol­lars for Medi-Cal, the state’s health­care pro­gram for the poor. Brown and leg­isla­tive leaders said it would be pre­ma­ture to act while the fate of the Af­ford­able Care Act re­mains un­known.

The plan for Cal­i­for­nia’s new fis­cal year is balanced, in part, by the con­tin­ued strength of in­come tax rev­enue. It also re­lies on a stag­gered start date for some of the spend­ing de­mands made by the Leg­is­la­ture. $183.2 bil­lion in to­tal state funds are al­lo­cated

Cal­i­for­nia gov­ern­ment spend­ing will hit a record high in the bud­get that be­gins July 1, up some $12 bil­lion in just a sin­gle year.

Bud­gets are com­posed of three spend­ing cat­e­gories for state dol­lars: gen­eral funds, special funds and bond funds. In each of those, next year’s bud­get raises the bar.

The gen­eral fund, formed by most per­sonal in­come and sales tax rev­enues, is the state’s main checking ac­count. It ac­counts for 68% of all spend­ing in the new bud­get. Special funds are made up of a va­ri­ety of fees and taxes divvied up to unique op­er­a­tions — such as mo­tor ve­hi­cle taxes and pro­fes­sional li­cens­ing fees. Bond funds are dol­lars bor­rowed, usu­ally with voter ap­proval, for pro­jects in­clud­ing flood pro­tec­tion, schools and con­struc­tion.

85 cents of ev­ery state dol­lar is spent in five bud­get cat­e­gories

State gov­ern­ment spends money on hundreds of ser­vices and pro­grams. But from a bird’s-eye view, five bud­get pri­or­i­ties outpace all oth­ers in the new plan signed into law.

The top spend­ing pri­or­i­ties will cost Cal­i­for­nia tax­pay­ers $156 bil­lion. Health and hu­man ser­vices, in­clud­ing Medi-Cal health­care cov­er­age and so­cial safety net pro­grams, get the largest share at $60.2 bil­lion.

Next K-12 public schools get $54.2 bil­lion, which av­er­ages to about $11,000 per pupil — a sharp in­crease from just a few years ear­lier.

Pris­ons and cor­rec­tional ser­vices get $13.7 bil­lion.

The Univer­sity of Cal­i­for­nia, Cal State Univer­sity and com­mu­nity col­lege op­er­a­tions in the state re­ceive $15.3 bil­lion.

Trans­porta­tion agen­cies get $12.8 bil­lion to fund op­er­a­tions in­clud­ing Cal­trans, the De­part­ment of Mo­tor Ve­hi­cles and the Cal­i­for­nia High­way Pa­trol.

An $8.5-bil­lion ‘rainy day’ cash reser ve, enough to weather a mild re­ces­sion

In 2014, Cal­i­for­nia vot­ers strength­ened the rules for set­ting aside a por­tion of tax rev­enues. That amend­ment to the state’s Con­sti­tu­tion au­to­mat­i­cally trig­gers money set aside in the fis­cal year begin­ning July 1 — a fund that will, by next sum­mer, to­tal $8.5 bil­lion.

Most of that money comes from wind­falls of in­vest­ment in­come earned by Cal­i­for­nia’s most wealthy tax­pay­ers, the kind of prof­its that quickly dis­ap­pear dur­ing an eco­nomic down­turn. That volatil­ity has been a ma­jor con­trib­u­tor to the state bud­get’s boomand-bust cy­cles of the past.

Com­bined with a sep­a­rate short-term cash re­serve fund, the in­de­pen­dent Leg­isla­tive An­a­lyst’s Of­fice noted Thurs­day that the state has the largest cash re­serve at any time in more than 35 years. Last fall, the an­a­lysts pre­dicted that Cal­i­for­nia’s bud­get has enough saved cash to ride out a mild re­ces­sion over the next three years — with­out ma­jor tax in­creases or pro­gram cuts.

More than 363,000 peo­ple now earn a state gov­ern­ment pay­check

The size of Cal­i­for­nia’s state gov­ern­ment work­force isn’t shaped di­rectly by an en­acted bud­get, but the plan does have to pro­vide money for their salaries and their re­tire­ment ben­e­fits.

So where are the 363,630 state jobs funded un­der this bud­get? Al­most 42% of them are in higher ed­u­ca­tion. The state De­part­ment of Cor­rec­tions and Re­ha­bil­i­ta­tion comes in a dis­tant sec­ond at al­most 15.6% of the work­force.

The growth in the state gov­ern­ment work­force has been small in re­cent years. The state De­part­ment of Fi­nance es­ti­mates there are now roughly 9 state em­ploy­ees for ev­ery 1,000 Californians — the same num­ber as there were in 1970. (The high­est in the last half­cen­tury, 10 work­ers for ev­ery 1,000 Californians, was in 2010-11).

The state bud­get signed Tues­day al­lo­cates $11.2 bil­lion in pay­ments to the Cal­i­for­nia Public Em­ploy­ees’ Re­tire­ment Sys­tem — a com­bi­na­tion of the reg­u­lar pay­ment and an ex­tra $6bil­lion con­tri­bu­tion — and $2.8 bil­lion to the Cal­i­for­nia State Teach­ers Re­tire­ment Sys­tem.

Rich Pe­dron­celli As­so­ci­ated Press

GOV. JERRY Brown presents the bud­get, which in­cludes $50 mil­lion for le­gal aid for im­mi­grants.

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