National Beat Reporter
The University of California system will be freezing in-state tuition for the next two years on all ten campuses. In exchange, Gov. Jerry Brown announced that the UC system will receive additional millions in funding, part of the state’s revised $115.3 billion budget proposal. The record budget also includes a tax credit for the poor, but stops short of increasing funding for social programs that were cut during the recession.
The budget revision includes a 1.8 percent increase in general fund expenditures to $115.3 billion. This proposed increase reflects an unexpected $6.7 billion increase in state tax revenue since Brown’s original budget proposal in January.
Under the new plan, the state will spend an extra $436 million on the UC system to pay down the system’s future pension liabilities. The money will be given to the UC as a four percent increase in spending over the next four years.
The extra funding for the UC is the result of months of tense negotiations between Brown—who did not want UC tuition increased—and UC President Janet Napolitano, who threatened to raise tuition by as much as five percent over the next five years if the UC did not receive increased funding.
Out-of-state tuition was not included in the deal. While the tuition for California residents will be capped for the next two years, out-of-state tuition could possibly increase by as much as eight percent for the next two years, and five percent in the third year.
Overall, the budget will propose more funding for public schools, a significant increase from proposed figures from January. The budget provides for $68.4 billion for the state’s public schools for 2015-2016, up from an estimated $65.7 in January. According to Brown’s office, the increase amounts to an additional $3,000 per K-12 student.
Most of the state’s extra tax revenue will be going toward schools and community colleges. A state law created when voters passed Proposition 98 in 1988 requires the increase in the education budget. The law requires for a little less than half of all extra tax revenue to go toward funding K-14 education. However, Brown’s proposed increases are closer to 80 percent of the extra tax revenue. This is because the state has to repay billions to schools that it had withheld during previous budget crises.
Approximately $17 billion of general fund money will go toward the UC, the California State University system, and community colleges in California.
The budget also called for an earned-income tax credit for the working poor. While the average tax credit would be around $460 per year, a maximum credit of $2,653 will be available for families with three or more children. The tax credit would be available to individuals with incomes less than $6,580, and families (with three or more dependents) making less than $13,870 a year.
This comes as a response to criticism that Brown’s original budget plan did not include enough assistance for the state’s working poor. While popular among Republicans, the tax credit was also praised by Democrats, who said it still did not go far enough to help seniors, the disabled, immigrants, and unemployed parents.
The budget revision also includes $18 billion for funding Medi-Cal and $10 billion for prisons and rehabilitation programs. $2.2 billion of the extra revenue will go toward state efforts to curb greenhouse gas emissions, including developing high-speed rail and energy-efficient affordable housing.
The overall budget does not contain as much spending on social programs as progressive lawmakers would have hoped. Brown’s reluctance to spend more reflects his fiscally moderate approach that has made him popular among Republican lawmakers, while frustrating several in his own party who prefer to see the deep cuts made during the recession restored.
But the Governor’s tightfistedness reflects his warnings that another recession could be in California’s future, particularly with the threat that the state’s historic drought could have on the economy.
“We have to learn from history,” said Brown at a news conference. The governor urged against careless post-recession spending, arguing that the idea of an economic recovery as an excuse for massive spending with no consequences has proven “demonstrably false by the last 12 years.”