In his State of the State address Thursday morning, Gov. Jerry Brown made it clear that he doesn't want the state budget surplus to be swallowed up by new spending commitments.
Instead, he emphasized the importance of putting money in the rainy day fund to mitigate the effects of future economic downturns and honoring existing commitments.
"The challenge is to solve today's problems without making those of tomorrow even worse…In that spirit, you're not going to hear me talk about new programs today, rather I'm going to focus on how we are going to pay for the commitments we already have," Brown said.
Assembly Speaker Toni Atkins (D-78) said she agreed with the governor's cautious approach.
"Assembly Democrats, who led the effort to create the state's Rainy Day Fund, support the Governor's call for responsible budgeting," Atkins said in a statement.
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The two issues that Brown called special legislative sessions to address, a Medi-Cal fix and road repairs, were predictably highlighted in his speech.
According to the Riverside County Press-Enterprise, a Medi-Cal change has to be passed to fund the state's increasing healthcare costs, or it could cost California $1 billion in federal funding. The current tax providing the funding is set to expire because it only taxes plans that accept Medi-Cal patients, which isn't in line with the Affordable Care Act. To get the state matching funds, California has to tax all health plans.
While a new tax might be unpopular with Republicans in the legislature, Brown called for both sides of the aisle to take advantage of the federal matching program to fund Medi-Cal. He said, however, the new program isn't a tax.
"This is not a tax increase, no matter what anyone tells you," Brown said.
Assemblyman Marc Levine (D-10) said he supports the governor's Medi-Cal financing reform efforts.
"We must fully fund Medi-Cal, in-home supportive services, and developmental services for those most in need," Levine said in a statement.
Brown also called for new taxes and fees to fund road repairs. He proposed that part of this year's surplus go toward one-time infrastructure investments. He said, however, that one-time expenditures won't be enough.
"We have no choice but to maintain our transportation infrastructure, yet doing so without an expanded and permanent revenue source is impossible. That means at some point, sooner rather than later, we have to enact new fees and taxes for this purpose," Brown said.
Senate Republican Leader Jean Fuller, 16th District, said Senate Republicans stand against new taxes because California has a substantial budget surplus with which to fund the programs.
"While [Brown] acknowledged that California must operate with fiscal restraint, he also called for increasing taxes on areas such as health care and transportation….Senate Republicans remain committed to finding solutions to all of California's challenges, but we believe those solutions can be found by prioritizing our spending, not raising taxes," Fuller said in a statement.
Brown has significant funds and political clout to throw behind or against ballot measures on the November 2016 ballot. Some proposed measures oppose issues he has advocated, like a $25 billion water delta tunnel project that would divert water from the Sacramento River. The only potential ballot measure he mentioned, however, was in jest: An initiative that would let the governor run for a fifth term.
Brown bookended the speech by first reminding the audience of the devastating impacts of the previous recession, including deep cuts to schools and universities, a credit rating that was the worst in the nation, a deficit of $27 billion and high unemployment. He ended on a high note, however, citing facts about how far the state has come since 2011: The state budget is in a surplus, and the state's credit rating has been raised three times.