The Governor this week unveiled his proposed 2017-2018 budget, which kicks of the legislative session in earnest.  Although California’s budget remains balanced, it is still in a “precarious” position with lots of unknowns on the horizon with a new President being sworn in next week.  During a luncheon at the California Chamber of Commerce, Department of Finance Director Michael Cohen hit some of the budget highlights, a plan that keeps General Fund spending flat at $122.5 billion, while warning of a potential $1.6 billion deficit.

Cohen stated, “Our revenue forecast, compared to what we thought when the Governor signed the budget in June, the 2016 budget, is down by 5.8 billion dollars.” To reflect this lower expectation of revenue growth, the proposed budget contains $3.2 billion in solutions.  The Governor also proposed increasing the state’s Rainy Day Fund to $7.9 billion, which is 73% of its constitutional target.

The Governor’s budget proposes $3.2 billion in budget solutions:

–        Adjust education funding ($1.7 billion). Taking spending down to the minimum constitutional (Proposition 98) guarantee.

–        Recapture 2016 one-time allocations ($0.9 billion). Not spending money that hasn’t been committed, i.e. money for affordable housing and for updating state office buildings that was never allocated.

–        Constrain spending growth ($0.6 billion).

Click hereto read the Governor’s press release and see much more detail about the spending plan.

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