State Budget

State Budget

Richard Bloom at a Budget Subcommittee #3 hearing on March 20th, 2013.

On Friday, June 14, the Legislature passed the 2013-14 State Budget. The process which began five months earlier with the Governor's budget proposal in mid-January, included 70 public hearings. For the first time in almost three decades, the Legislature passed its third consecutive on-time balanced budget. Below are some of the highlights of that process.

2013-14 State Budget Highlights

  • Balanced Budget. The budget is balanced, with a reserve of $1.1 billion and is structurally balanced throughout the entire forecast period.
  • Pays Down Debt. The budget pays down $4.2 billion in budget debt, including over $2.1 billion in deferrals to schools.
  • Cautious Revenue Estimate. The budget is based on the Department of Finance General Fund revenue projections, rather than the Legislative Analyst's modestly more optimistic forecast.
  • Sets Stage For Rainy Day Fund. With maintaining budget stability, the stage is set for crafting a workable Rainy Day Fund for the November 2014 ballot that captures spiking capital gain revenues to protect against economic downturns.

  • Additional Funding for Schools. The budget provides billions in new investments for schools, including a funding formula to target resources to low income students and English learners. The final agreement on the funding formula meets all four conditions set by the Blueprint for a Responsible Budget, including:
    • Increases funding for early care & preschool programs (over $100 million) and a CalWORKs Child Poverty Adjustment grant increase as a first step in ensuring low income children have a real chance at educational success in the classroom.
    • Ensures all schools benefit from the increased revenues and economic recovery by altering the Governor’s formula proposal to provide higher base grants and to ensure every school district has their funding restored to at least their pre-recession levels.
    • Benefits all low income and English learner students throughout the state, not just those in high concentration areas by targeting funds to all qualified students and ensuring districts target the funds toward these students with accountability measures.
    • Provides smart use of one-time Prop 98 funds by repaying over $2 billion in Prop 98 deferrals and by providing $1.25 billion for Common Core State Standards transition costs.
  • Increased Funding and Access to Higher Education. The budget provides significant new investments for Higher Education and makes college more affordable for the middle class, with the following:
    • Increases funding for UC and CSU of $250 million, this increase will grow to over $1 billion by 2016-17.
    • Begins the Middle Class Scholarship for the 2014-15 school year to slash student fees by up to 40% for families making under $100,000 and up to 10% for families earning $150,000. Therefore, once fully implemented, the Scholarship will phase down to 10% for families earning between $100,000 and $150,000 (i.e. family income of $100,000 – 40% scholarship; income of $125,000 – 25% scholarship; family earning $150,000 – 10% scholarship.)
  • Improved Programs for Families Striving for the Middle Class. The budget makes meaningful progress in improving programs that help families striving for the middle class, including:
    • Increases investments in welfare-to-work programs including family stabilization and subsidized employment.
    • Doubles the value of a vehicle a CalWORKs recipient can own in order to receive benefits, this is a key change necessary to ensure families retain their car – often the key to being able to get back to work.
    • Reestablishes a modified Adult Dental program to provide dental services that are necessary for the health and social wellbeing of individuals needing to have bigger participation in the economy.
    • Expands Medi-Cal to 138% of federal poverty to provide access to healthcare for the working poor. In addition to the expansion, the budget provides a greater level of services than originally proposed by the Governor and ensures immigrant parents can remain in the same program as their children.

  • Cuts Business Filings Processing to Five Days. The budget follows through on the Assembly’s action in the Spring to permanently cut the processing time for the Secretary of State to process business filings from over 60 days to no more than five days.
  • Updates Local Coastal Plans. The budget provides $4 million for Local Coastal Plans to be updated to streamline and improve coastal zone changes in accordance with the Coastal Act.
  • Improves Services for Veterans. The budget provides $3 million for state staff to assist the federal government in processing disability claims of California veterans, and $3 million for County Veteran Service Officers to outreach to veterans to provide eligible services.
  • Increased Funding for Courts.The budget provides a modest increase of $63 million for Courts, as a first step in establishing an adequate funding level. The increased funds come with accountability measures ensuring funds are spent protecting services and to ensure public access to key judicial branch administrative decisions.

For more detailed information about the 2013-14 State Budget such as budget bill analyses and committee reports, click here.

You can also obtain various budget documents by visiting the California Department of Finance which produces the Governor's budget proposals and budget revisions or by visiting the Legislative Analyst's Office, a non-partisan fiscal and policy advisor to the Legislature and Governor.