A Republican Perspective The 2013-14 Budget A Republican Perspective

Governor’s Spin Governor states that his budget is balanced and lives within its means Continues to pay down the wall of debt Invests in Schools

Governor declared that his budget is balanced Fact Check: True but… With tax increases, rosy assumptions, and deferred debt repayments

Fact Check: Governor Rejects Balanced Approach 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: Budget Relies on Rosy Assumptions 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: Governor Slows Wall Of Debt Repayment by $1 billion 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.

Governor claim: Invests in Education Fact Check: True: Governor adds $2.7 billion in K-14 education funding This is simply the minimum guaranteed by Proposition 98

Fact Check bottom line: Education Does Not Get All of Proposition 30 New Funds 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.).

Governor Spin: Invests In Higher Education True: By $1.3 billion $320 million increase for CSU $280 million increase for UC $700 million for Community Colleges But….

Higher Education Investment Provides Limited General Purpose Funding 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

Republican Opportunities 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). Jobs & the Economy