California Gov. Jerry Brown proposed his 2013-14 revised California state budget plan Tuesday, showing a potential surplus which has caused much debate over whether the money should be delegated to government programs, or held on reserve.
Brown’s proposal, based on revenue forecasts determined by the California Department of Finance, allowed for a potential $1.1 billion to be reserved as a Special Fund for Economic Uncertainties, for future determination regarding its use.
“The governor’s proposal is balanced and it calls for a reserve of about $1.1 billion,” California Department of Finance deputy director for external affairs H.D. Palmer said.
The issue that is under debate is whether this $1.1 billion reserve is detracting from money that could be used for other programs or to reduce the state debt.
“The debate will probably be over how big of a reserve there should be,” Palmer said. “Some will want to put less in the reserve so we can spend more money on other programs, but the governor believes that $1.1 billion is a prudent amount.”
Palmer said this reserve is important because it is where the state will draw funds in case of emergencies such as natural disasters.
“For example, if for some reason it costs more than what is budgeted to cover wildfire suppression, then we would draw from the reserve,” Palmer said. “It’s oftentimes referred to as the ‘rainy day fund.’”
California State University (CSU) representatives said because the budget has not yet been approved by the California legislature, nothing can be said as to whether any surplus funds would benefit higher education rather than be reserved.
“At this point, none of the additional revenue from January to May that would be associated with such a surplus is coming to the CSU,” said CSU public affairs assistant Liz Chapin.
The California state legislature has until June 15 to approve or deny the budget, which would go into effect in July. The issue of how much money to keep in the reserve is up for debate by the California legislature, but Brown has the power to line-item veto any reductions they make to the reserve fund.
“(The reserve amount) will be determined by the governor before he signs the budget,” Palmer said.
As to whether any surplus money may escape the reserve to instead benefit higher education, Palmer said the issue is as much a part of the debate as anything else.
“That would depend upon what the legislature’s spending priorities are,” Palmer said.
Cal Poly students have voiced their own concerns on the topic. Mechanical engineering junior Kyra Wells said at this point, she would be more likely to support paying off the state debt before adding funds to education.
“After Prop 30 passed, it seems like there’s already a pretty big portion of the budget set for education,” Wells said. “I think that for the state, as a whole, it’s probably best to focus on using the surplus to start paying off the debt.”
The proposed budget plan itself places a high dollar amount on education, with the majority of budgeted education money going toward elementary and high schools. Universities are represented with a proposed 11.4 percent of state funds, amounting to $11,109 million. Palmer said K-12 schools and community colleges are receiving the majority of the aid based on current legislature that guarantees them support.
“Higher education doesn’t have the same constitutional guarantee,” Palmer said. “The governor’s proposal would provide for predictable year over year increases for the (Univeristy of California) and the CSU over the four year period, but those increases would be predicated due to a certain number of circumstances.”
Ultimately, nothing can be decided until there are tangible funds to use, but the anticipation of those funds has been enough to start a heated debate.
“We predict that we’re going to be in a positive place over the next few years,” Palmer said.