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Savings for a Rainy Day

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NEWS

Savings for a Rainy Day

CALIFORNIA: Governor Brown’s new budget uses a massive surplus for projects and puts money in the bank.

By Christian Walsh
February 14, 2018


Bob Tilden

California Governor Jerry Brown has proposed new budget plans that leave the state with one of the largest surpluses since the 2007-2009 Great Recession.

Brown, who ends his second term this year, projects that California will have a surplus of around $6.1 billion.

Despite the surplus, Governor Brown has refused to spend most of it.

His main goals are to keep the state on a path of long-term financial stability, establish a rainy day fund and to acquire more adequate funding for institutions such as schools and health care.

Stabilizing state funds will allow debts and liability, including deferrals and budgetary obligations that have accumulated over the previous decade, to be paid off. This was identified to be around $35 billion in May 2011.

He has promised to dedicate $300 million to fund projects such as climate change reparations and educational programs, keeping the rest in the rainy day fund.

His bill will continue to work on the continuous problem of climate change by including a legislation to extend California’s landmark cap-and trade program until 2030. This program aims to reduce greenhouse gas emissions to below that of the 1990 emission levels.

Additionally, the fund will strengthen the transportation infrastructure; it will go to the Road Repair and Accountability Act, created in 2017, which provides stable long-term funding for state and local street projects.

Brown’s plan also calls for bonds and special funds dedicated to specific sources like tobacco taxes and universal health care that sums up to an estimated $59 million.

Warning that a recession will eventually happen, the Governor stated that the rainy day fund exists to protect the paychecks of teachers and other government workers.

“What we can talk about is spending now and cutting later, or filling the reserves and continuing our spending right along,” Brown said.

“This is about steady as you go, or exuberance followed by regret and pain.”

Phil Ting, Democratic Assemblyman and chairman of the budget committee, states that he is glad to see Brown putting the money towards what really matters—children and schools in need. He considers this a first step in the right direction.

With the imminent changes that the recently-passed GOP federal tax plan will bring, Governor Brown filed his proposal last December, a month before the tax plan was set to take place.

Brown plans to use a portion of the the budget toward other items such as starting an online community college, which will cost around $120 million to build.

California has some of the highest tax rates of any state. Last year California raised car and gas taxes by $5 billion.

In 2017 Brown signed a $125 billion budget that would increase pay for Medi-Cal doctors and dentists who provide for poorer patients, and for funding education and social services.

The final budget is expected to be revised by the Democrat-controlled legislature and on the governor’s desk to sign in the summer.


Christian Walsh is currently a news writer for The Mirror. He joined during his junior year and is in his first year of journalism.

Other than his efforts in journalism, he also enjoys playing piano and spending time with friends. He enjoys all forms of music, and loves spending lots of time on Youtube and Discord. He would like to major in computer science in the future.


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Savings for a Rainy Day