Calif. Democrats Propose More Education Spending, $8B Reserves

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LOS ANGELES -- Democrats in the California State Assembly released a "blueprint for a responsible budget" for the next fiscal year that would eventually create an $8 billion reserve while boosting spending on higher education and social services.

Assembly Speaker John A. Pérez, D-Los Angeles, and Assembly Budget Chair Nancy Skinner, D-Berkeley, released the 2014 plan on Wednesday, ahead of Gov. Jerry Brown's initial budget plan, expected to be presented to the legislature next month.

Pérez and Skinner said they planned to work closely with their legislative counterparts and the governor to approve a budget by the June 15 constitutional deadline.

"By following this budget blueprint we can ensure fiscal stability in California by establishing a real rainy day fund and building the state's budget reserve," Pérez said. "We can also expand opportunity by making prudent investments in job creation, job training, early childhood education and higher education."

He did not include estimates for such "investments," but said the plan addresses the needs of the poor, improves access to healthcare, and gets cap and trade revenues reinvested into the state's communities.

The plan includes strengthening Cal Grants for college students and expanding funding for the University of California and California State University to prevent further fee increases and expand enrollment. It also proposed establishing a "Universal Transitional Kindergarten" to help children prepare for starting school.

Other areas of focus include reducing child poverty and generating loan guarantees for small business expansion throughout the state.

The creation of an $8 billion reserve by 2016-17 would meet recommendations by California's Legislative Analyst's Office to protect against economic downturns. It would also include a new rainy day fund.

The plan calls for $2 billion to be set aside in the fund next year, with additions each year thereafter.

"This blueprint makes prudent use of one-time funds, pays down the debt and helps create jobs," Skinner said.

California's budgetary condition is stronger than it has been in the past decade, according to analysts at the LAO. The nonpartisan forecaster recently projected that the state would end the 2014-15 fiscal year with a $5.6 billion reserve, and operating surpluses for the next couple of years. The forecast assumes continued economic growth.

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