Politics, government and public life for Southern California

Legislative analyst sees $3.2 billion more in California revenues than Governor

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The waiting is over.

With the release Friday of the Legislative Analyst’s projected revenues — and its appraisal of the governor’s revised budget — Democrats in Sacramento have the information they need to start making choices on where they’ll agree to the Governor’s mostly flat-spending plan, and where they’ll push to restore cuts to social programs.

The analyst projected $3.2 billion more in revenues than the Brown Administration estimated earlier this week, money that would flow into the state’s general fund. The Governor’s finance team predicted Tuesday that the federal payroll tax increase and global economic challenges would erode the state's surplus to $2.8 billion.

The LAO stated: “We do not agree with the administration's view of the state's revenue situation.”

The analyst said the recent rise in stock prices and other economic improvements bode well for higher tax revenues. But the report also cautioned that’s no reason to go wild:  “After years of ‘boom and bust’ budgeting, California's leaders now have the opportunity to build a budget for future years that gives the state more choices.”

By law, most of the surplus revenue goes to public schools and community colleges because of the Prop 98 funding guarantee. The LAO estimates “only several hundred million dollars” will be left for other general fund programs.

“No one should interpret these figures as an automatic green light to increase spending,” said Assembly Speaker John Pérez (D-LA) via email just moments after the state analyst released the revenue projections. Pérez said surplus revenue should be used "to pay off debt, build the reserve, and strengthen the middle class.”

That last phrase refers to a  host of programs Pérez outlined in a budget blueprint proposal. The plan calls for improvements to state-subsidized childcare, early education programs, and a  scholarship fund for middle class students to attend public universities.

Senate Pro Tem Darrell Steinberg (D-Sacramento) has said he wants to restore some money to mental health care and he's authored a bill to restore dental care under Medi-Cal — the state's healthcare program for low-income residents.

Assemblywoman Holly Mitchell and Senator Ed Hernandez, both L.A. Democrats, back that effort and another to reverse a 10 percent reduction in the state's reimbursement rate for providers who treat low-income patients.

Republican lawmakers say any extra money should go to public schools and into the state’s rainy day fund. Senator Bill Emmerson (R-Redding),  who co-chairs the budget committee, said: “We should keep the promise made to the voters.”

Emmerson, who was an orthodontist for 26 years, does support restoring adult dental care for Medi-Cal patients.


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