LOS ANGELES - California Gov. Jerry Brown made a special appearance before a legislative committee to testify for his new rainy day fund proposal.
Brown, along with Assembly Speaker John A. Pérez, laid out the proposal for the Assembly Budget Committee on April 28.
Brown called a special session in April to ask lawmakers to replace the rainy day fund proposal currently scheduled for on the November ballot with his new proposal.
"By putting forward this rainy day fund for consideration by the voters, we can take advantage of this unique opportunity and ensure that our hard-won fiscal stability continues," Pérez, D-Los Angeles, said during his testimony. "We cannot afford to fall back into the bad habits of the past where we commit to ongoing spending and tax cuts in good years, and then are forced to pass major cuts and tax increases on the middle class in bad years."
The proposal would make changes to the rainy day fund measure that the legislature advanced in 2010 to improve the state's budget reserve.
The governor's administration said that measure has several shortcomings, including the lack of a realistic option to pay down the state's debts and liabilities.
His new proposal would allow the Legislature and governor to either put short term spikes of capital gains revenue into the fund during boom years, or use that revenue to pay down budget debt and unfunded liabilities.
It would also increase the size of the Rainy Day Fund from the current 5% of the General Fund to 10%, limit withdrawals to make sure the state doesn't overly rely on the fund during the start of a downturn, and create a special reserve to smooth school spending under California's Proposition 98 school funding rules and avoid future cuts.
If approved by the legislature, the measure would go before voters as a constitutional amendment in November.