The budget is passed.  But this budget “compromise” of $96 billion between Legislative Democrats and Governor Brown has problems. They claim “California is back” and that our state’s budget problems are solved. But if you go beyond their talking points, I still see a budget which contains many fiscally questionable decisions.

On education, voters approved $50 billion in Proposition 30 tax increases last year based on the belief that it would protect education. Yet the budget reduces the debt repayment that schools are owed by $676 million. The state will still have to pay back this money to schools, but it will be delayed by another year.  This budget also does not use the new taxes to help make a college education truly affordable. My Republican colleagues and I proposed a plan earlier this year to freeze tuition at our public colleges and universities as long as the Proposition 30 taxes are in effect.  However, the majority party rejected the tuition freeze proposal in the final budget.

On public safety, the budget continues to shortchange our counties on realignment. Last year, the majority party changed the funding formula to give more money to urban and coastal counties while taking money away from inland ones. The Democrats rejected amendments to bring equity for inland counties such as San Bernardino to implement the Governor’s realignment law. Currently, San Bernardino County is receiving an estimated $5.5 million less than it should while San Francisco County is receiving an additional $5 million. Such an imbalance makes it more difficult for other state counties to prevent the early release of some inmates.

In addition, Democrats relied on the usual budget gimmicks of the past to obscure spending increases in other areas. For example, they increased welfare payments that will cost taxpayers in future years. Also not included in the budget is additional money to cover the costs of new labor contracts that would give raises to state workers. By not including these massive spending increases this year, Democrats are creating the illusion that they passed a fiscally-restrained budget.
While the budget does make some progress in debt reduction, it does not address the state’s other unpaid obligations. This includes unfunded state worker pensions that are estimated to be as high as $500 billion and $10 billion in federal loans to cover unemployment insurance benefits.
At the end of the day, debt is not free money. It is money that has to be paid back, and making it easier to approve such debt means more debt and taxes in the future. In a sense, the Democrat budget punts difficult decisions into the future while praying that the economic recovery will continue. This budget may not be as bad as previous years, but it is based on much wishful thinking.
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