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Live Blog: Gov. Jerry Brown Releases Revised Budget

Ben Adler / Capital Public Radio

Ben Adler / Capital Public Radio

11 a.m. -- California Governor Jerry Brown released his May budget revision Thursday. It includes money to pay down debt and strikes a deal with the University of California to hold tuition flat for two years. But Brown remained cautious about additional spending, such as more money for state-subsidized child care.

“Another recession is on the way – we just don’t know when. That’s why this budget locks billions into the Rainy Day Fund and pays down debt,” said Brown in a statement. “At the same time, this budget spends more than ever on schools and creates a new tax credit to help California’s working poor.”

Brown allocates an additional $6 billion to K-12 schools and community colleges over his January budget proposal. He’s also proposing a state Earned Income Tax Credit for low-income earners. The credit is expected to benefit 2 million people and would work in conjunction with the federal EITC.

In exchange for keeping tuition flat for the next two years, the University of California would receive help paying down its unfunded pension liability. The money would come from the recently voter- approved Proposition 2. Brown’s revision sets aside $3.8 billion for Prop 2. Half would go toward paying down existing debt and long-term liabilities. The other half would be saved in the Rainy Day Fund reserve.

The revision also includes $2.2 billion for drought response programs. The May budget revision would bring the state’s General Fund budget to $115.3 billion.

-Katie Orr / Capital Public Radio

10:30 a.m.

Governor Brown's revision to his proposed budget includes an additional $2.2 billion in response to the drought in California. The money will come from the water bond voters approved last fall and will provide an additional $1.7 billion over three years for water recycling, safe drinking water and wastewater projects. The majority, $784 million, will be dedicated to projects that prevent or clean up the contamination from groundwater.

Brown also wants an additional $245 million for projects that save water, including $104 million for urban water conservation programs. The State Water Resources Control Board recently approved mandatory requirements for urban water suppliers to conserve between 8 and 36 percent. The money will be used to implement consumer rebate programs to replace lawns and inefficent appliances.

-Amy Quinton / Capital Public Radio

10 a.m. :

May Revise 2015 by Capital Public Radio


Original Story

California Gov. Jerry Brown will include a state earned income tax credit in the revised budget proposal he'll release Thursday morning, according to information provided by the Brown administration to Capital Public Radio.

The proposed tax credit would benefit an estimated two million Californians in deep poverty while reducing state budget revenues by $380 million a year. It was first reported by the Los Angeles Times.

The governor has been criticized for not doing enough for the more than six million Californians in poverty. And Assembly Democrats called for a state earned income tax credit earlier this month.

Brown is still expected to take an overall tone of fiscal restraint in his budget proposal. State tax revenues have surged past projections by more than $3 billion through April. But under California's constitution, nearly all of that money will be set aside for schools.

Under the governor's proposed earned income tax credit, households without dependents would be eligible if their income is less than $6,580. Those with three or more dependents would be eligible if they earn up to $13,870.

The tax credit would be refundable. That means Californians who owe less money on their taxes than they would qualify for in this credit would get a refund from the state.

"Our state has the highest poverty rate in the nation, so we should absolutely consider every policy that helps the most economically vulnerable, especially those that are working and still struggle to make ends meet," says Amanda Fulkerson, a spokeswoman for Assembly Republican Leader Kristin Olsen. "The EITC is one policy that merits discussion, but it will not end widespread poverty."

The governor proposes that the credit take effect beginning with the 2015 tax year.

The federal government already has an earned income tax credit. But not all Californians who receive the federal credit would be eligible for Brown's proposed state credit, which would be targeted at the lowest-income Californians.