Jerry Brown releases revised California budget

May 16, 2011 12:00:00 AM PDT
Gov. Jerry Brown released his revised budget proposal for California Monday, but recent improvements to state revenue could create a problem for him.

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The Democratic governor released his revised budget proposal for the fiscal year that starts July 1, a spending plan that mixes hope for better days ahead with a warning about the future if the Legislature fails to enact his plan for higher taxes.

Public schools will receive nearly $3 billion more under his plan but would be hit particularly hard if his call for higher taxes is rebuffed in the Legislature or by voters.

The governor proposed spending of $88.8 billion, a nearly 5 percent increase over the budget he introduced in January. The boost was fueled by rising sales, personal income and corporate tax receipts - the three main sources of the state's general fund.

The governor expects an overall increase of $6.6 billion in tax receipts for the coming year.

He said Monday he still wants to renew the increases to the sales and vehicle taxes this year but not the increase to the personal income tax. Instead, that increase would be reinstated for the 2012 through 2015 tax years.

The additional revenue would mainly go to education and to pay for the realignment of public safety programs to local agencies. He argued that the relative tax burden would remain below historic levels.

Without the renewal of the higher taxes, Brown said California faces a budget deficit of about $20 billion in two years.

He would not say whether he had an alternate plan if Republican lawmakers continue to block his call for tax renewals.

Democratic lawmakers have been stressing that billions more would have to be cut from education, shortening the school year and enlarging class sizes. But Republicans say that California's economy is improving and recent growth in state tax revenue is enough to protect education.

The governor and Democratic lawmakers already have reduced the original $26.6 billion deficit through spending cuts and transfers between government funds.

There's one month left to reach a budget deal, before the deadline set by California's constitution.

The Associated Press contributed to this story

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