Brown spares K-12 education, wants tax extension

California Governor Jerry Brown points to a chart as he speaks to reporters as he announces his proposed budget at the California State Capitol on January 10, 2011 in Sacramento, California. Governor Brown announced a balanced state budget that cuts spending by $12.5 billion and includes an eight to ten percent cut in take home pay for state employees and proposes a "vast and historic" restructuring of government operations. less California Governor Jerry Brown points to a chart as he speaks to reporters as he announces his proposed budget at the California State Capitol on January 10, 2011 in Sacramento, California. Governor Brown ... more Photo: Justin Sullivan, Getty Images Photo: Justin Sullivan, Getty Images Image 1 of / 8 Caption Close Brown spares K-12 education, wants tax extension 1 / 8 Back to Gallery

Calling for a "vast and historic" reworking of state government finances, Gov. Jerry Brown Monday said he would release a $127.4 billion state budget for the 2011-12 fiscal year that includes dramatic spending cuts of $12.5 billion - including as much as a 10 percent cut in take-home pay for some state employees.

Brown also is counting on voters to approve an extension of taxes that are set to expire this year to prevent even deeper cuts. He said that even though voters rejected taxes in 2009, he believes it's time for voters to reconsider the issue.

"It's a divisive issue," he said. "I think there is a significant number of people who have an open mind and it will be up to the Legislature and myself and the business community and citizen groups and parent teacher associations to make the case."

His budget plan makes deep cuts to the University of California, California State University and California Community Colleges while protecting funding for kindergarten through 12th grade education.

At a news conference this morning, he said that K-12 education has "borne the brunt of spending reductions," in recent years and that "in this budget we keep them at current level of spending."

The governor's budget includes total spending of $127.4 billion for the 2011-12 fiscal year - including $84.6 billion for the state general fund. But his office said the budget calls for $12.5 billion in spending cuts, $12 billion in modifications and extending taxes that are set to expire this year, $1.9 billion in other solutions to close the gap while providing for a $1 billion "rainy day" reserve.

Among Brown's proposals:

-- Eliminating redevelopment agencies throughout the state and eliminating tax benefits for enterprise zones - moves that would "return billions in property tax revenues to schools, cities and counties and help pay for public safety, education and other services," the governor said.

-- Cutting $1.7 billion to Medi-Cal

-- Cutting $1.5 billion to California's welfare-to-work program, also known as CalWORKs

-- Cutting $750 million from the Department of Developmental Services

-- Cutting $500 million from UC, which now receives about $2 billion a year

-- Cutting $500 million from CSU, which now receives about $2 billion a year

-- Cutting $400 million from community colleges

-- Cutting 10 percent in take-home pay for about 57,000 state employees who are not currently covered under collective bargaining agreements. This move would save about $308 million

Brown warned that the budget will be painful, and require individuals and businesses to sacrifice.

"It's time to restore California to fiscal solvency and put California back on the road to economic recovery and jobs," he said. "We are going to return decisions and authority as much as possible to cities and counties and schools, and that way there will be greater accountability and transparency and hopefully citizen participation."

The governor said he would cut state government operations by $200 million through a variety of actions, including "reorganizations, consolidations and other efficiencies."

"These cuts will be painful, requiring sacrifice from every sector of the state, but we have no choice," Brown said in a statement. "For 10 years, we've had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth."

Brown's budget proposal includes a plan for what he called a "five year extension of several current taxes" to allow the state to pay off and restructure debt "in an orderly fashion," and it also calls for the consolidation and elimination of some state functions.

He said if voters don't approve taxes extensions, then deeper cuts would be required.

"If somebody has better ideas, I'd like to hear about them," he said. "We've made some drastic cuts and to do more is going to impair the quality of public service."

He said he wants the Legislature to put the tax extensions on the ballot, which would require a two-thirds vote by lawmakers.

"I've met with Republicans and they are not locked in stone in opposition... I think we'll get some Republican votes. They're not going to be ready today," he said.

Brown's office said the proposed spending plan will put $1 billion into a "rainy day" reserve fund, and promises to erase California's budget deficit "now and into the future."

The governor, in his statement, argued his realignment plan returns more power and decision-making authority to cities, counties and schools districts at the local level while allowing government "to focus on core functions and become more efficient and less expensive" by reducing duplication of services and administrative costs.

The budget will be posted online later today at www.ebudget.ca.gov.