It was a relatively easy budget for Democratic leaders to put together because state revenues have been running ahead of projections and voters approved temporary tax increases in 2012 so there was money to go around. Republicans are irrelevant because the Legislature can approve the budget with a simple majority and Democrats dominate both houses.
Among them the doubtful priorities:
The absurd high-speed rail project: Brown pushed very hard to allocate money in the upcoming fiscal year to try and get the train under construction. Fortunately, it is held up by a court decision that simply requires the agency to follow the law according to what was on the ballot in 2008 when voters approved $9 billion in bonds for construction. The rail falls short of promises in almost every area and is quite simply a huge waste of money for a project that will do nothing for highway congestion or air pollution.
Nonetheless, Legislative leaders agreed to $250 million in the upcoming year and 25 percent of cap-and-trade revenues going forward. In exchange Senate leader Darrell Steinberg, who wanted universal preschool paid for by the state, got $264 million to establish that new entitlement program that liberal Democrats will seek to expand every year when the budget is healthy. The high-speed rail funds will be allocated annually without another vote of the Legislature and—like most elements of this deeply flawed project—it is questionable whether it meets the requirements of the greenhouse gas law.
An improvement in the budget is the deal that already had been announced between the governor and Legislative leaders for both a rainy day fund and a strong plan to pay down the state's "wall of debt." The debt totaled $34.7 billion and will be reduced to $14.8 billion next July and totally eliminated by 2018—of course that debt does not include the unfunded liabilities in the pension systems.
The most curious priority was the choice to establish the new preschool program and fail to reverse a 10 percent cut in reimbursements for physicians treating Med-Cal patients. The number of poor people enrolled in the program soared with the state's aggressive push of Obamacare signups and magnified the existing shortage of doctors willing to treat Med-Cal patients. Given that revenues are quite healthy, it is a crazy choice that will exacerbate an already bad situation. If anything, given the demand, the state should have both reversed the cut and added to reimbursements to encourage physicians to treat people.
So much for compassion for the poor.
