What does ‘May Revise’ portend for Benicia, other California cities?

Gov. Jerry Brown has made his annual May adjustments to his proposed budget this week, based on a predicted $2.4-billion increase in state revenues.

While Brown, who released the modifications Tuesday, has said the May revision continues to pay down debt and reduce long-term liabilities while shoring up the teacher pension system, the Benicia Unified School District may see little benefit from the changes.

“Governor Brown’s budget May revision does not provide any additional funds for the Benicia Unified School District when compared to his January budget proposal,” said Tim Rahill, the district’s chief business official.

“In fact, the governor’s May Revise increases the district cost towards the teachers’ retirement system by $260,000, which will have to be paid from the district’s General Fund.”

Nor, Rahill said, is there “mention of increased funding to implement the new state educational standards called ‘Common Core.’”

Nor does the budget provide any funding for the new Transitional Kindergarten program, which is designed to provide a universal program for all 4-year-old children, Rahill said.

“By the end of June, we will see if there are any changes to the Governor’s May Revise as the state Legislature reviews it, and eventually approves a final state budget,” he said.

State Sen. Lois Wolk, the Davis Democrat whose district contains Benicia, said of the May Revise, “The Governor’s budget revision reflects a recovering economy.”

She agreed that the modifications do little to help extend kindergarten or preschool programs. Nor does it restore many of the previous cuts to human services programs, she said.

On the other hand, “There are some increases in emergency drought response, public safety and the courts, additional funding to repay local government, as well as a healthy effort to stabilize CalSTRS and pay down the wall of debt,” Wolk said.

CalSTRS is the California State Teachers’ Retirement System.

Wolk added that she is “looking forward to working with the governor to establish a solid financial future for California and begin the effort to reinvest in our communities.”

Assemblymember Susan Bonilla, the Concord Democrat who represents Benicia in the lower house, said the proposed 2014-15 budget would be the first to be balanced in many years.

“A structurally balanced budget provides the ability to ensure stability for the budget and expand opportunity for California families,” she said, noting that in the past 10 years only the 2006-7 budget showed any surplus, and that wasn’t much by California standards.

The rest of the yearly budgets ranged from structural deficits of less than $5 billion to several years with deficits of $20 billion or more.

Bonilla said Assembly Democrats want the 2014-15 budget to build reserves to $8 billion, to make judicious use of one-time funds and to bring prison housing costs under control.

Her colleagues also want greater investments in early and higher education, jobs, health care improvements and programs to reduce childhood poverty — points Bonilla called “guideposts.”

Though state Sen. Bob Huff of Diamond Bar is the Republican leader of the upper house, he said he was pleased that Brown is focusing on fiscal responsibility.

“Overall, I think this is a pretty good budget plan,” Huff said. “Spending restraint has been our mantra for years. I appreciate that he borrowed heavily from Republican proposals like the rainy day reserve, paying off our debts and addressing unfunded liabilities like CalSTRS.

“The governor has been pretty responsible thus far with his budget plans, and any unanticipated tax revenues must go to reducing that mountain of debt.

“We are not debating spending cuts and more taxes,” Huff said. “That’s because the voters approved a $45 billion tax increase that was intended for education and public safety.”

However, he expressed concern whether all of the tax increase would end up in those accounts.

He added, however, that he has other concerns about keeping high-speed rail in the budget and using cap-and-trade taxes for that project, and said Brown doesn’t go far enough to help counties deal with the ongoing problems from the public safety realignment.

That realignment is Brown’s response to the Supreme Court ruling that California’s prison overcrowding must be reduced because it prevents the state from providing proper care for inmates.

Realignment transfers state prisoners who have committed certain crimes to county authorities, either to serve time in jail or for probation.

“The evidence of a significant threat to our communities is mounting and we shouldn’t wait for a catastrophe before we fix it,” Huff said.

Besides the $2.4-billion one-time revenue increase from a personal income tax, partnership and dividend income, Brown’s May revisions include $10 billion in Proposition 98 minimum funding for kindergarten through 12th grade education, including $4.5 billion to continue funding the Local Control Funding Formula that calculates how much money school districts receive based on daily attendance and other factors; a $1.2-billion increase to address an anticipated $2.4 billion needed to cover Medi-Cal costs under the Affordable Care Act; $142 billion in increased drought-related funding; and $430 million for anticipated spending for the California Public Employees Retirement Services.

Brown also increased court operations earmarks to $150 million from $100 million, put more responsibility for teacher retirements on school districts and the teachers themselves, and added $100 million to repay a portion of existing mandate reimbursement claims owed to local governments since 2004.

Given past expansion and contraction of California’s economy, Brown has called for “rainy day” savings, saying that when revenues improve, the state should avoid making new ongoing commitments and instead put money away whenever possible until the reserve reaches 10 percent of revenues.

Those interested may read the full budget online at www.ebudget.ca.gov.