SACRAMENTO, Calif. (AP) - California Gov. Jerry Brown on Wednesday released his last annual budget proposal as he opens his final year in office. His proposal to spend $131.7 billion from the general fund, plus $59 billion from bonds and other revenue sources, kicks off five months of negotiations with lawmakers, who must approve a spending plan by June 15. The Democratic governor projects California will have a $6.1 billion surplus but he wants to keep nearly all of it in reserve for a future recession. Here’s are some of the highlights from his plan:
MARIJUANA
Brown projects California will raise $643 million in taxes during the first full fiscal year of marijuana sales through licensed stores - less than the $1 billion that state experts previously predicated the program would raise.
Recreational pot sales began Jan. 1, but it’s been difficult to project prices, demand and the location of stores.
Where the tax money goes is mostly set in stone through a formula approved by voters in 2016.
The first $135 million will pay back the general fund for costs of building the state bureaucracy to regulate marijuana, Brown said. The rest will go toward research, mitigating the effects of past criminalization and drug abuse treatment.
WILDFIRES
Last year’s ferocious wildfires caused the state to exceed its firefighting budget by nearly $470 million. But Brown’s budget proposal does not beef up wildfire spending for next year.
CalFire, the state firefighting agency, dipped into its emergency fund to handle the extra costs.
The governor’s budget assumes next year’s fire season will be typical. But it has plenty of reserves available to use if California faces another series disaster, budget director Michael Cohen said.
CORRECTIONS
California’s general fund spending on prisons and parolees climbs about $300 million, to $11.7 billion, under Brown’s proposal. The prison population is projected to drop by about 6,300 inmates primarily because voters in 2016 approved allowing officials to offer earlier parole to most offenders.
Brown called for raising the ceiling to age 25 for young offenders to remain in the Division of Juvenile Justice, continuing a recent trend in treating youthful offenders more leniently with the understanding that their brains have not fully developed. The age limit was cut from 25 to 23 in 2013 to save money and reduce the juvenile population by about 40 offenders. The budget also proposes $3.8 million to divert a limited number of offenders aged 18 to 21 from adult prisons to juvenile facilities.
Community rehabilitation programs would get $64.4 million, up nearly $19 million from the current year.
EDUCATION
California would create its own online community college under Brown’s plan, costing about $120 million to get it up and running.
About 2.5 million young Californians in their 20s and 30s have high school diplomas but aren’t accessing higher education, Brown said. An online college would give them more flexibility.
Meanwhile, tuition for the first year of traditional community college will be waived for most students if they take 15 credits per semester.
On K-12 education, Brown proposes boosting spending by $3 billion for a program aimed at helping California’s neediest students. That’s part of the Local Control Funding Formula, passed in 2013. Brown’s fresh investment would fully fund it two years ahead of schedule.
Senate Democrats argued the state still isn’t investing enough in public schools.
HEALTH CARE
The governor’s budget proposal assumes that federal lawmakers will reauthorize the Children’s Health Insurance Program, which covers pregnant women and kids from low-income families.
Federal funding, which covers 88 percent of costs for the program, lapsed in September. It was later renewed temporarily but expires again in March. Brown’s budget estimates Congress will ultimately continue the program but reduce its share to 65 percent.
State officials have warned that coverage for 32,000 women and children will be endangered if the program is discontinued.
Brown did not include funding to extend state-funded health coverage to low-income people living in the country illegally. Assembly Democrats had proposed that change, which they project would eventually cost $1 billion a year.
FEDERAL TAXES
Brown doesn’t reflect any changes to federal tax law in his budget plan, which he finalized in mid-December before Congress passed its tax overhaul.
The new law is expected to hit taxpayers in high-tax states harder because it caps the state and local tax deduction at $10,000. Californian’s who claimed the deduction took an average of $18,000 in 2015.
A plan in the state Senate would allow people to work around the change by making a charitable contribution to the state in lieu of state taxes. They could then deduct that from their federal tax bill.
Such a change would likely need to be reflected in the state budget, even though it’s intended to be revenue neutral. Brown said he’s open to that idea but still has questions. His May budget revisions could include a response to federal changes.
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