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Governor Brown releases proposed California budget

California Governor Jerry Brown

May 13, 2014 2:24:03 PM PDT
California Governor Jerry Brown released his proposed state budget Tuesday featuring higher-than-expected tax revenues. It's a record level spending plan.

In the current fiscal year, the state's tax revenue is running more than $2 billion ahead of expectations. The governor's office said expenditures have increased at a similar rate, however.

Brown cautioned that the surplus is needed for higher-than-expected health care costs and an underfunded teachers' pension system.

California's debts remain massive.

Legislative Analyst Mac Taylor said last week that California has $340 billion in debts and unfunded liabilities, or more than $8,500 for each of its 38 million residents.

Much of the long-term liability comes from the shortfall in the teachers' retirement system and health benefits promised to 277,000 retired state employees.

The governor is projecting $107.8 billion in spending from the general fund, the state's main account for paying day-to-day operations, bringing total state spending to $156.2 billion for the fiscal year starting July 1. That's $1 billion more than the general fund plan Brown proposed in January.

The figure represents a 24 percent increase over the $87 billion general fund budget approved during the 2011-12 fiscal year, the low point of the recession when California cut billions of dollars from state programs and furloughed state workers.

"I can tell you this is good news for California," Brown told reporters Tuesday.

The Brown administration had projected 10.5 million people would enroll in Medi-Cal in the 2014-15 fiscal year but now projects 11.5 million will be covered.

Republicans applauded the governor for striking a cautionary tone.

Lawmakers have until June 15 to make changes and pass a balanced budget for the fiscal year that begins July 1.

The Associated Press contributed to this report.