Gov. Jerry Brown used his line-item veto power to cut $128.9 million in spending from the $91.3 billion general fund state budget he signed in addition to another $66.8 million in spending from special and federal funds Thursday, according to Deputy Director of the California Department of Finance H.D. Palmer.
Brown's cuts come in addition to a budget signed June 27 with the assumption that voters will approve his proposed tax hikes in November. The budget cuts $8 billion from close to a $15.7 billion deficit and build a reserve of nearly $1 billion, according to the newly passed budget.
"The reason the governor made the cuts today is because he wanted to have a higher budget reserve," Palmer said. "If we have a bad fire season, those additional costs are covered out of the reserves."
The state legislature also included a tuition freeze in the $142.6 billion budget, so there will no immediate tuition increases for students in the University of California and California State University systems for the 2012-2013 academic year.
"This budget reflects tough choices that will help get California back on track," Brown said in a statement. "I commend the Legislature for making difficult decisions, especially enacting welfare reform and across-the-board pay cuts. All this lays the foundation for job growth and continuing economic expansion."
One of the initiatives pending voter approval is the "Schools and Local Public Safety Protection Act," which would temporarily increase income tax on high-income earners by up to three percent for seven years and increase the state sales tax by one-quarter of one cent for four years, according to the budget.
Another $6 billion in additional cuts to education and public safety will be triggered Jan. 1, 2013 if the initiative does not pass, Palmer said. The bulk of it, about $5.4 billion will be cut from K-12 and community college education and $250 million will be cut from the UC and CSU systems respectively, Palmer said.
The budget involves a increase in funding for K-12 and community college education subject to voter approval, a five percent cut to state employee compensation and reduces corrections facilities spending among other initiatives, according to the budget. The budget is built on the $16 billion cut last to to eliminate the $26.6 billion deficit the state inherited, according to the budget.
"My revenue proposal is fair and temporary," Brown said. "Our state budget problem was built up over a decade, and it won’t be fixed overnight. These temporary increases will ensure funding for our schools until the economy improves."
"The decisions that we have to make in this economic environment are difficult, but necessary to get our fiscal house in order," Senate President pro Tem Darrell Steinberg said in a statement about the June 27 budget. "I believe that with the work we have done this year and the work we will continue in the coming weeks, we are turning the corner and beginning a different era in California. Certainly the era of interminable late budgets is over and if we can continue on this path, we can finally put these unending deficits behind us and begin reinvesting in California."
Steinberg said he was "so dissapointed with the blue pencil," but he also recognized "that the Governor has that constitutional authority." "I have always said that balancing the budget is a prerequisite to having the ability and opportunity to restore much of what has been lost."