LOS ANGELES - California Gov. Jerry Brown released his revised budget proposal Tuesday morning, which includes $11 billion to pay down the state's debt and a plan to fully fund the teachers' retirement system over 30 years.
"This budget is good news for California," Brown said during a press conference in Sacramento. "The revised budget shows that California can afford to enroll more than 1 million people in the medical program. Secondly, this budget allows us to pay down our debts and for the first time sets the state to fully fund teacher's pension."
The plan proposes to reduce the state's "Wall of Debt," as Brown terms the state's maze of intrafund borrowings, payment deferrals, and other debt, by more than $11 billion this year alone and fully eliminate it by 2017-18. The Wall of Debt has been reduced to less than $25 billion today from $34.7 billion in 2011, when Brown took office, the administration says..
Since 2011, when the state faced a $26.6 billion budget deficit and estimated annual shortfalls of roughly $20 billion, the deficits have been eliminated by a combination of budget cuts, tax increases and the recovering economy.
Brown's proposal includes setting aside $1.6 billion to completely pay off its outstanding Economic Recovery Bonds, which were authorized in 2004 to cover earlier budget deficits.
The plan also includes adding another $1.6 billion to the state's rainy day fund.
"This is taking a bite out of our long-term obligations," Brown said.
The release of the budget plan comes just days after an agreement was reached with legislative leaders of both parties to establish a rainy day fund based on Brown's January proposal.
Under the new Rainy Day Fund plan, the state would increase deposits when it experiences spikes in capital gains revenues, make supplemental payments to accelerate payoffs of the state's debts and liabilities, and raise the maximum size of the fund to 10% of general fund revenues.
The proposal is expected to go before voters in November.
Brown's
The new plan includes higher spending to provide health care coverage under Medi-Cal for a million more people, emergency drought assistance, and added funding to meet the Proposition 98 funding guarantee for K-14 schools.
For teacher pensions, Brown is proposing a plan for the state, school districts, and teachers to together increase contributions by $450 million during the first year, which would grow to more than $5 billion annually in 2020-21. The plan would eliminate the State Teachers' Retirement System unfunded liability in approximately 30 years.
The revised budget also provides an additional $142 million in drought-related expenditures for firefighting, emergency response, water management, wildlife preservation, and food assistance.
The State Legislature will have until June 15 to make changes and pass a balanced budget for the fiscal year that begins July 1.
