California Governor Proposes New Budget as Revenue Soars

California's booming economy and a $6.1 billion budget surplus has Governor Jerry Brown thinking about future economic woes once growth begins to slow. During a final round of negotiations with fellow Democratic leaders, Brown put forward a $137.6 billion general fund budget, an increase of almost $6 billion from his prior proposal in January.

Governor Brown’s management of state finances has resulted in a 45 percent growth from 2011. A sharp increase in income among affluent Californians and a 40 percent income tax revenue for those making $1 million or more has erased the $25 billion deficit present when Brown entered office. Fearing a future recession and now with revenue to spare, Brown has recommended tucking away $13 billion in a rainy day fund for future spending use. Although California is enjoying remarkable growth, Brown has cautioned that the wave of good fortune, like all cyclical economic trends, will end and preparation for the fallout is necessary.

Nevertheless, Brown has promised $2 billion to put toward the state's infrastructure. These funds would be put towards state facilities, judicial buildings, universities, flood control, and managing the state's homeless population. Other proposals include allocating $96 million for wildfire prevention and introducing an online community college program geared toward working adults.

Fellow Democrats are weighing in on other pressing matters that deserve budget attention. State Assembly Democrats hope to secure $1 billion in funds to use for the state's health care system. The proposal includes $250 million for Medi-Cal coverage to immigrants residing in California illegally and relief from high monthly premiums for those who purchase their own health coverage. Democrats have also suggested broadening the earned-income tax credit for low income Californians.

The State Assembly and Senate have until June 15th to pass a finalized budget, and failure to do so will result in docked pay under California’s Constitution.

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