On Monday, June 27, Gov. Edmund G. Brown Jr. signed the legislative bill establishing the state budget for fiscal year 2016-17, which begins July 1.
“This solid budget makes responsible investments in California and sets aside billions of dollars to prepare for the next recession,” said Brown in a press release.
Total state spending is estimated to be $170.9 billion, of which $122.5 will come from the General Fund.
The balanced, on-time state budget doubles California’s Rainy Day Fund, pays down debt, increases school funding and boosts programs to combat poverty and homelessness.
In addition to the constitutionally required $1.3-billion deposit, the budget directs an extra $2 billion contribution into the Rainy Day Fund — bringing the state’s reserve fund to $6.7 billion, or 54 percent of the goal.
The budget also directs $1.75 billion to the Special Fund for Economic Uncertainties, which also helps the state meet obligations in the face of declining revenue or unanticipated obligations, and pays down debts and liabilities by $1.3 billion from Proposition 2 funds.
The minimum funding guarantee for K-12 schools and community colleges will grow to $71.9 billion this year, the highest level in state history and a $24.6 billion increase since 2011-12. Per-pupil K-12 funding is increased to $10,643, a $440 increase over last year and a $3,600 increase over 2011-12 levels.
New funding for the Local Control Funding Formula is $2.9 billion — bringing the formula’s implementation to 96 percent complete.
This year’s budget begins implementing the state’s new $15 per hour minimum wage by raising the statewide minimum wage to $10.50 per hour beginning Jan. 1, 2017. The budget also funds cost-of-living increases for Supplemental Security Income/State Supplementary Payment, the first boost since 2005.
The budget also repeals the “maximum family grant rule” in CalWORKs, which had denied support to children born to parents who were receiving aid. It also limits the state’s asset recovery from the estates of deceased Medi-Cal recipients.
The budget reflects $3.6 billion in state and federal funding and award authority for many affordable housing and homelessness programs, including increased funding for CalWORKs rapid rehousing and emergency homeless shelters.
Of this amount, the budget sets aside $400 million in the General Fund for allocation later in the legislative session for affordable housing programs. Also, legislation will authorize a $2 billion bond from a portion of future Proposition 63 mental health revenues to develop and administer homelessness and affordable housing programs for the mentally ill.
The budget includes funds for drought relief programs such as grants and emergency projects, as well as enhanced fire protection and tree removal grants. Also, Cal Fire received $12 million to begin replacing its helicopter fleet.
Assembly Speaker Anthony Rendon (D-Lakewood) said in a statement, “The budget the governor just signed reflects the Assembly’s top priorities, including lifting families out of poverty, increasing access to early childhood education and making college more accessible for California students. This balanced, on-time budget — which also responsibly grows the state’s Rainy Day Fund — is the result of hundreds of hours of public hearings. That shows the budget process is working and our final product means California is in stronger fiscal shape than we have been for years.”
But two weeks ago, after the Legislature passed the budget bills, local state Sen. Jeff Stone said, “… The budget — which spends a record $122.5 billion from the General Fund the upcoming fiscal year — is an increase of $6.9 billion from last year. Even as the cost of state government continues to skyrocket, Gov. Brown is warning of dire days ahead for state revenue. His own administration is projecting an operating deficit of $4.1 billion in 2019-20, and that was before all of the additional spending legislative Democrats tacked on to this budget in recent days.”