I have long contended that California’s Democratic Governor Jerry Brown is the only true fiscal conservative in American politics.  In many ways Brown is a liberal, and an often admirable one, but for decades perhaps his most distinctive characteristic has been his hesitancy to spend money.  It would not be out of line to call him a political skinflint.  In some contexts this is quite positive.  When, following the disastrous administration of action movie star Arnold Schwarzenegger, Brown was reelected in 2010 to the post he first held for two terms back in the 1970s, California was a fiscal disaster.  Now, in good measure thanks to Brown’s stewardship (and to strong Democratic majorities in the legislature) the state’s financial condition is more solid than I can remember in decades.  However, when the state is flush with funds Brown’s tendency to stash money away “for a rainy day” can lead to trouble.  Back in the ’70s large state budget surpluses accumulated by Brown, who famously refused either to increase spending or cut taxes, fed the anti-tax sentiment that led to the disastrous Proposition 13, which so restricted the state’s ability to raise property taxes that many see in it the original sin behind many of California’s subsequent fiscal and political ills.

Which brings me to the present, when once again the state’s finances are very much in the black.  Yesterday, Brown released his proposed 2016-17 state budget, forecasting annual revenues that are $3.5 billion higher than previously projected for the current fiscal year (2015-16) and $2.4 billion higher for 2016-17.  Yet, as the nonpartisan California Budget and Policy Center put it in their “First Look” at the proposal, “Despite this stronger-than-expected revenue growth, the Governor’s proposed budget misses a chance to boost investment in broadening Californians’ economic opportunity and security while still saving for a rainy day and paying down state debts.”

According to the Center’s report,

The Governor’s proposal sets aside a portion of 2016-17 revenues – $3.1 billion – with half deposited in the state’s rainy day fund and half used to pay down state debts, as required by Proposition 2 (2014).  However, the Governor also proposes to deposit an additional $2 billion in the rainy day fund beyond Proposition 2’s requirements, leaving significantly less funding for other priorities.

While heavily emphasizing growing the reserves, the Governor’s proposal misses several opportunities to strengthen vital public services and systems. It includes only modest increases for higher education – a key to the state’s economic future – no significant reinvestment in child care, and no additional investment in a welfare-to-work system that was deeply cut in recent years. Meanwhile, the proposal does not include a plan to tackle systemic issues – including over-reliance on incarceration – that contribute to ongoing prison overcrowding and persistently high corrections spending. . . .

Despite a strong revenue outlook, the Governor’s budget proposal falls short of presenting a plan that adequately prepares the state for future growth by striking a balance between saving for a rainy day and addressing the state’s biggest challenges: stagnating wages for low- and middle-income Californians, widening income inequality, and public supports weakened by years of disinvestment.

With respect to higher education, the governor’s proposed budget continues a multiyear plan that modestly increases General Fund spending for the California State University (CSU) and the University of California (UC), with the expectation that CSU and UC will improve performance and avoid tuition and fee hikes.  Specifically, the proposed budget would increase funding for the CSU by $125.4 million for 2016-17, but require CSU to adopt a funding model based primarily “on student success that targets additional resources to campuses that are successfully serving the students with the greatest needs,” whatever on earth that means.  (Technically, the proposed increase is $148.3 million ongoing, pursuant to sustainability plan assumptions, an increase of $27 million for health benefits for CSU retirees, an increase of $1.5 million ongoing for the California Digital Open Source Library, and the removal of $25 million in one-time funds provided in 2015-16.)

In November, the CSU trustees made a $102.3 million dollar request that would supplement the governor’s multi-year funding plan of $139.4 million. According to a CSU press statement,

The supplemental request prioritizes $25 million to infrastructure to address the CSU’s $2.6 billion deferred maintenance backlog and $50 million for student success and completion measures.

The governor’s multi-year funding plan provides $139.4 million to the CSU. Mandatory costs will consume $112.6 million, leaving only $45.6 million to address enrollment growth, student success programs and facilities maintenance. The governor’s plan allows for 1 percent enrollment growth—amounting to 3,500 new students. The funding available through the multi-year funding plan does not adequately address enrollment demand nor will it allow the university to meet other funding priorities.

The request was clearly not granted.  However, in a statement released today, CSU Chancellor Timothy P. White said:

The governor’s budget proposal affirms his commitment to invest in the California State University and acknowledges the university’s vital role as an economic driver and the state’s largest producer of bachelor’s degrees. An investment in the CSU serves the public good by enabling the university to provide quality degree programs and social mobility to the students of California who are among the most ethnically and economically diverse in the nation. The university’s four- and six-year graduation rates are at a 10-year high, and they will continue to improve as we remain laser focused on increasing graduation rates by 2025. Our investments in new faculty, practices that highly impact student success and increasing online education opportunities are paying off. With continued state support, we remain on track to bolster graduation rates and to graduate an additional 100,000 students over the next decade. An investment in the university is an investment in the future of California.

Jennifer Eagan, President of the California Faculty Association (CFA), an AAUP affiliate that represents some 25,000 faculty, librarians, and coaches in the CSU said of the proposal:

We are pleased that Gov. Brown continues to reinvest in public higher education by including an increase in his state budget proposal for the California State University.

While we appreciate this investment, we also know that in order to meet the needs of thousands of California students clamoring to enroll in the CSU, even more resources will be needed.

CFA intends to work closely with our allies in the legislature and with the governor not only to increase the resources invested in the CSU, but also to ensure that tuition and tax dollars are spent on the university’s core mission—teaching—rather than on increasing the size and salaries of the university’s administration.

The CFA and the CSU administration are currently at impasse in negotiations for a reopener contract agreement on salary and CFA members have voted overwhelmingly to authorize a strike, should the statutory process fail to produce an agreeement.  CFA is asking for a 5% across-the-board increase plus service salary adjustments for those eligible.  Funding for such increases was not included in the trustees budget request and does not appear to be in the governor’s proposal.

The proposed budget also increases funding for UC by $125.4 million and indicates that UC is expected to implement reforms and achieve outcomes specified in a 2015 agreement between Brown and UC president Janet Napolitano, such as reducing student time-to-degree outcomes and improving instruction and operations through the utilization of data and technology.  (Interestingly, there does not appear to be a single agreed-upon text of this agreement.)

With respect to California’s 113 community colleges, the governor’s proposed budget would provide nearly $250 million in new funding to increase access to career technical education programs, increases funding for CCC general-purpose apportionments by $114.7 , and reduces mandate debt the state owes to the community colleges $76.3 million (mandate debt is the cost of state-mandated services that the colleges provided in prior years, but for which they have not yet been reimbursed).

The Faculty Association of the California Community Colleges (FACCC) issued this statement:

FACCC is grateful to Governor Brown for his continued support of the California Community College system but disappointed in the lack of funding for such priorities as full-time faculty hiring and support for part-time faculty categoricals. The academic infrastructure must be the top priority in these budget discussions to achieve student success. We look forward to working with the Governor and Legislature throughout the budget process to maximize opportunities for our students.

The proposal is only the start of a lengthy budget process.  In May, the governor will release the “May revise,” an amended proposed budget reflecting more current fiscal information that may also respond to reactions to the January proposal by legislators and others.  A final budget is due by mid-June.