$7.5 Billion in New Revenue in Revised Budget
Governor Arnold Schwarzenegger released the May Revision of the budget today which includes $7.5 billion in new revenue.” This budget does not raise taxes and pays down California’s debt by several billion, which is a step in the right direction. We need to be fiscally prudent in order to end our structural deficit,” said Senator George Runner (R-Antelope Valley). The Governor’s May Revise pays down California’s debt, increases dollars for public safety and increases equalization funding for K-12 schools by to $300 million. On that subject, Senator Runner’s legislation to increase equalization funding is SB 1358 which is joint-authored by Senator Joe Simitian (D-Palo Alto) and will likely be included in ongoing budget negotiations. Runner continued, “We will continue to work with the Governor on tax incentives for businesses including support for the Mojave Spaceport. I will also work to ensure that Santa Clarita Valley schools get their fair share.”
May Revise Budget Highlights
Contains $7.5 billion in TOTAL new revenue: $4.8 Billion (2005-06)
$2.7 Billion (2006-07)
$7.5 Billion TOTAL
Of the new revenue listed above, the May Revision estimates that approximately $1.7 billion annually, is ongoing. This budget helps bring the state’s fiscal house in order and lowers the overall debt without raising taxes.
Provides an additional $1.6 billion to pay down debt and future obligations, including, for a total of $3.2 billion in 2006-07.
$1 billion General Fund to Pre-Pay Economic Recovery Bonds, leaving a balance of $8.9 billion, with an estimated total payoff in 2008-09.
Proposes a $2.2 billion reserve, up from $613 million.
The May Revision pays down debt; however there is still a long way to go towards eliminating the $20 billion in outstanding borrowing the state has incurred over the last several years.
Proposes to spend $53.3 billion in ongoing Proposition 98 funds for education in 2005-06 (a $4.6 billion increase over 2004-05), increasing to $55.1 billion in 2006-07 (up $1.8 billion from 2005-06).
Proposes $3 billion in “one-time” Proposition 98 funding, paid over seven years, starting in 2007-08.
Provides $300 million for K-12 equalization (up $100 million from the amount proposed in January)
PUBLIC SAFETY AND CORRECTIONS
Includes $142 million for public safety initiatives including:
$19.5 million for training for local law enforcement and probation officers.
$42.6 million in increased funding for the Citizens’ Option for Public Safety (COPS) program.
$20 million for the War on Methamphetamine program.
$10.1 million for Vertical Prosecution programs.
$40 million for Mentally Ill Offender Crime Reduction grants.
Includes $200 million for increased population in the Department of Corrections and Rehabilitation.
RESOURCES AND ENVIRONMENT
Proposes $100 million from the General Fund for the state’s share of costs for local flood subvention projects.
Proposes $500 million from the General Fund on a one-time basis for flood control projects including levee evaluations, repairs, and flood control system improvements.