The 2013-14 BudgetA Republican Perspective

Governor states that his budget is balanced and lives within its means

Continues to pay down the wall of debt

Invests in Schools

Governor’s Spin

Fact Check: True but…

With tax increases, rosy assumptions, and deferred debt repayments

Governor declared that his budget is balanced

Budget Balanced with Taxes/No Cuts

Proposition 30 is expected to raise $6.3 billion in 2013-14

Spending increase is $6.3 billion (from adopted budget)

Reserve is $1.0 billion

Note: In addition to Proposition 30 tax increase, the Governor has $675 million in healthcare tax increases in his budget. The Governor goes on to balance his budget by reducing the amount of debt to be repaid by $1 billion

Fact Check: Governor Rejects Balanced Approach

Redevelopment money will materialize - $700 million

Cap and Trade money will materialize - $300 million

Revenues will be up $1.1 billion over 2012-13 budget projections

Note: Absent the Governor’s optimistic assumptions the budget deficit would be about $2.1 billion.

Fact Check: Budget Relies on Rosy Assumptions

Fact Check: Governor Slows Wall Of Debt Repayment by $1 billion

Beginning

Balance 2012-13 2013-14 2014-15 2015-16 Remaining 2012 Budget Act $34,165 $5,933 $5,244 $7,356 $6,708 $8,924 2013 Governor's Budget $34,165 $6,357 $4,198 $5,955 $7,345 $10,310 Difference $ (424) $1,046 $1,401 $ (637) $1,386

• With the 2012 Budget Act, Governor Brown adopted a schedule for paying down the "Wall

of Debt," however; it appears that schedule has been revised to balance the budget by delaying debt repayments.

• The table shows that the Governor proposes to reduce payments toward debt by $1 billion in 2013-14 and by $1.4 billion in 2014-15.

• A $1 billion delay in repaying special fund loans in 2013-14 is also notable because the budget would be in deficit mode absent this “solution.”

Fact Check: Spending is up by $6.3 billion, 6.9% from adopted budget

• Adjusting the 2012-13 budget upward to reflect $1.7 billion in increased spending since the budget was adopted in June.

• This makes the growth to $97.7 looks smaller when taken from the new base of $93 billion.

Fact Check: Apples to Apples General Fund Spending Hits All Time High!

• Governor claims spending is down since its peak of $103 billion in 2007-08.

• In fact, General Fund program spending is over $106 billion.

Fact Check: Total Spending Continues at Record Levels

• Total state spending since the recession began after 2007-08 has grown from $194 billion to $231 billion.

• Governor proposes $225 billion for 2013-14.

Fact Check: Prop 30 Tax Increases Provide New Revenue Windfall

• Baseline revenues grow by $26.5 billion by 2016-17.• Adding the new Prop 30 tax increases provides an additional $35.9 billion.• Bringing total state revenue growth to $62.4 billion.• The Proposition 30 tax increases far exceed the amount needed to restore the budget to

balance.

Fact Check: The Next State “Fiscal Cliff”

• $27.3 billion of new revenue is not being utilized to balance the budget, but in fact is funding $25 billion of new spending.

• It’s clear that legislative Democrats plan to test the Governor’s resolve by adding their own spending increases and pet projects.

• The spending increases are permanent, but the taxes are temporary.• If Democrats retain a supermajority in the legislature, it is highly likely that the temporary tax

increases will become permanent.

Fact Check:True: Governor adds $2.7 billion in K-14 education funding

This is simply the minimum guaranteed by Proposition 98

Governor claim: Invests in Education

Fact Check bottom line: Education Does Not Get All of Proposition 30

New Funds

Proposition 98 funding – Less Than Promised $ in billions 2012-13 2013-14 Minimum guarantee with no Prop 30 revenue $50.5 $52.9 Minimum guarantee plus all Prop 30 revenue $55.8 $59.2 Prop 98 funding proposed by Governor $53.5 $56.2 Shortfall $2.3 $3.0 Source: Legislative Analyst's Office

• K-14 Proposition 98 funding rises by about $2.7 billion, but that is only about 40 percent

of the $6.25 billion in new tax revenue generated by Proposition 30 -- education will not get the full benefit of those tax hikes, as voters were led to believe.

• Instead of targeting all of the Proposition 30 revenue toward education, the Governor’s budget plan uses some of it for his own priorities (e.g., over $1.2 billion for health and welfare programs, $400 million to end state worker furloughs, $250 million to fund increased state worker salaries and benefit costs, etc.).

True: By $1.3 billion

$320 million increase for CSU

$280 million increase for UC

$700 million for Community Colleges

But….

Governor Spin: Invests In Higher Education

Only $250 million of the $600 million for UC and CSU is available for general purposes. The rest of it has strings attached.

Only $200 million of the $700 million for the Community Colleges is available.

Net general purpose funding for Higher Education: Only $450 million

Higher Education Investment Provides Limited General Purpose

Funding

Education: Commitment to fund education and proposed a tuition freeze proposal.

Public Safety: Governor/Democrat Public Safety Realignment is a disaster

Government Oversight & Efficiency: Special Fund accountability (Parks), Education Reforms & Affordable Care Act.

Budget Reform: Spending Cap, Budget Trailer Bill Abuse, Public Transparency (3 day print rule/public hearings).

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