Gov. Brown Offers $122.2B Budget As Revenues Lag

SACRAMENTO, Calif. (AP) - Gov. Jerry Brown on Friday proposed a $122.2 billion spending plan for California, down slightly from his January proposal after he projected tax revenues falling about $1.9 billion below expectations and a deficit when voter-approved sales and income taxes begin to expire.

"The surging tide of revenue is beginning to turn, as it always does. That's why it's prudent and best that we prepare for a time of necessity," the governor said.

Tax collections have slowed since January, when Brown proposed a $122.6 billion general fund spending plan for the 2016-17 fiscal year beginning in July. By law, about half the state's spending goes to K-12 education and higher education.

The governor included some spending increases sought by his fellow Democrats, including higher spending for developmental disability services and higher payments to Medi-Cal providers.

Brown faced mounting pressure from Democrats to increase funding for some safety net programs that were slashed during the Great Recession. Still, he continued his push to add an extra $2 billion above what is required for the state's reserve fund, citing the need to prepare for the next recession.

"I'm going to be pretty resolute in this budget," he said.

Tax collections have slowed due in part to stock market fluctuations. The state controller reported Tuesday that revenue in April, the highest-earning month, was $1.19 billion short, mostly because personal income tax collections failed to keep pace with expectations.

It's unclear whether the weak revenue will continue, but the April figure may give ammunition to Brown, who is generally wary of spending increases.

Lawmakers from both parties have for months urged the governor to increase funding for programs they favor.

Democrats want $800 million to increase rates paid to subsidized daycare providers and to provide care to more children. They're also looking to eliminate the maximum family grant in CalWorks, which prevents families from getting additional welfare benefits if they have another child while receiving state assistance.

Republicans want to increase payments to dentists who serve the poor. They've also advocated a series of tax breaks, such as capping property taxes for seniors and disabled military veterans, creating a weekend-long sales tax holiday for school supplies and allowing people to use pre-tax dollars to save for a down payment on a home.

The state also faces a $59 billion backlog for road repairs, and Brown has seen no progress on his January call to raise gas taxes and vehicle fees to begin paying for the work.

Copyright 2016 The Associated Press.

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