CDCAN: GOVERNOR BROWN SAYS PROGRESS MADE BY STATE BUT CHALLENGE IS TO “BUILD FOR THE FUTURE, NOT STEAL FROM IT” AND TO “LIVE WITHIN OUR MEANS”

SACRAMENTO, CA [CDCAN LAST UPDATED 01/05/2015 – 10:53 AM] – Governor Edmund G. “Jerry” Brown, Jr. was sworn in this morning at the State Capitol Assembly Chambers for an historic unprecedented fourth and final term as governor outlining in his hopeful yet cautious inaugural address major priorities facing the State that he said will require restraints on new spending, reminding policymakers that  “…with big and important new programs now launched and the budget carefully balanced, the challenge is to build for the future, not steal from it, to live within our means” in order to keep California “ever golden and creative.”  The Governor combined his inaugural speech with his annual “State of the State” address to the Legislature. 
    Underscoring the need for fiscal restraint, the Governor mentioned his father – Governor Edmund G. “Pat” Brown” – and his first inauguration as governor in 1959, saying that “…the issues that my father raised at his inauguration bear eerie resemblance to those we still grapple with today: discrimination; the quality of education and the challenge of recruiting and training teachers; the menace of air pollution, and its danger to our health; a realistic water program; economic development; consumer protection; and overcrowded prisons” and that those problems “…never completely go away. They remain to challenge and elicit the best from us” and as a result, he told policymakers “…over the next four years – and beyond – we must dedicate ourselves to making what we have done work, to seeing that the massive changes in education, health care and public safety are actually carried out and endure. The financial promises we have already made must be confronted honestly so that they are properly funded. The health of our state depends on it.”
    The Governor made no specific proposals for any program beyond a general outline of priorities that included the state’s transportation infrastructure needs, funding of public employee pension including retiree health care costs, public safety, higher education, unknown new on-going costs due to the continued expansion of Medi-Cal under the federal Affordable Care Act, climate change initiatives, and water resources.
    The Governor will release the details of his proposed 2015-2016 State Budget on Friday, January 9th at 10:00 AM in a press conference at the State Capitol. [CDCAN will provide complete details of the proposed budget immediately when it is released].
    Brown, who will be 77 years old in April, was first elected as the 34th California governor in November 1974, and re-elected to a second term in November 1978, before term limits were put in place in 1990.  He was elected to a third term as California’s 39th governor in November 2010 and re-elected to a record breaking fourth and final term last November.     
 
GOVERNOR SAYS PROGRESS MUST CONTINUE WITH FISCAL RESTRAINT
    Anticipating the demand in the coming months from policymakers and advocates to increase on-going spending and restore previous major budget reductions in the coming 2015-2015 State Budget, the Governor told members of both houses of California Legislature and invited guests, that “…California feeds on change and great undertakings, but the path of wisdom counsels us to ground ourselves and nurture carefully all that we have started. We must build on rock, not sand, so that when the storms come, our house stands,” warning that the State was “at a crossroads”.
    The Governor repeatedly mentioned the need for restraint in new spending saying that “…we must not lose sight of our long-term liabilities,” as the State undergoes “…important changes to education, health care and public safety”.
    “We have to face honestly the enormous and ever growing burden of the many commitments we have already made. Among these are the costs of pensions and retiree health care, the new obligations under the Affordable Care Act, the growing government costs of dealing with our aging population, bonded indebtedness and the deferred maintenance on our roads and other infrastructure. These specific liabilities reach into the hundreds of billions of dollars,” the Governor said, adding that “My plan has been to take them on one at a time. We have now taken steps to deal with the unfunded teachers’ pensions and those of the public employees. For the next effort, I intend to ask our state employees to help start pre-funding our retiree health obligations which are rising rapidly”.
 
GOVERNOR SAYS CONTINUED EXPANSION OF MEDI-CAL UNDER AFFORDABLE CARE ACT WILL REQUIRE UNKNOWN INCREASED SPENDING BY STATE
    While Governor Brown made no mention of any specific health and human service programs including In-Home Supportive Services (IHSS), developmental services, SSI/SSP (Supplemental Security Income/State Supplemental Payment) grants, child care or CalWORKS (the State’s “welfare to work” program) he did raise a concern about the need for new on-going budget increases by the State in order to fund continued major expansion of the Medi-Cal program required under the federal Affordable Care Act that will mean new levels of spending that he said “…the full extent of which is not yet known.”
    “Along with education, health and human services constitute a major part of what state government does. And in the past few years we have made massive commitments in this area, which will require increasing levels of spending, the full extent of which is not yet known. For example, two years ago California embraced the Affordable Care Act, dramatically increasing its health insurance coverage under the Medi-Cal program. The state will enroll 12.2 million people during this new budget year, a more than 50 percent increase. Providing the security of health coverage to so many Californians who need it is the right thing to do,” Brown said, but reminded policymakers that “…it isn’t free. Although the federal government will temporarily foot much of the bill, new state costs – now and more so in the future – will run into the billions”.
 
FULL TEXT OF GOVERNOR BROWN’S PREPARED ADDRESS
Members of the Legislature, the Judiciary, Constitutional Officers, the extended family of my pioneering ancestors and fellow Californians:
 
 An inauguration is always a special occasion but today it is particularly special as I think about that day 40 years ago when my father and mother watched me take the oath as California’s 34th governor. It is also special because of how far we have come in the last four years. Then, the state was deep in debt – $26 billion – and our unemployment rate was 12.1 percent. Now, the state budget, after a decade of fiscal turbulence, is finally balanced – more precariously than I would like – but balanced. California has seen more than 1.3 million new jobs created in just four years and the unemployment rate has dropped to 7.2 percent. Thanks goes to the Legislature for cutting spending, the economy for recovering and the people for voting for temporary taxes.
 
 We also have the people to thank for Propositions 1 and 2, which save water and money and prepare us for an uncertain future. These are measures that nearly every Democrat and Republican voted to put on the ballot and nearly 70 percent of voters ultimately approved. And I’m proud to report that as a result, by the end of the year, we will be investing in long overdue water projects and saving $2.8 billion in the state’s new constitutionally protected Rainy Day Fund.
 
 And we’re not stopping there. Soon we will make the last payment on the $15 billion of borrowing made to cover budget deficits dating back to 2002. We will also repay a billion dollars borrowed from schools and community colleges and another $533 million owed to local governments.
 
 California has made bold commitments to sustain our environment, help the neediest and build for our future. We are leaders in renewable energy and efficiency; we have extended health care to millions; we are transforming our educational and criminal justice systems; we are building the nation’s only high-speed rail system; we raised the minimum wage; we are confronting the drought and longer-term water issues; and last, but not least, we have enacted real protections for our hardworking immigrants, including the issuance of long-awaited driver’s licenses.
 
 In 2011, we were handed a mess and through solid, steady work, we turned it around. While we have not reached the Promised Land, we have much to be proud of.
 
 As I embark upon this unprecedented fourth term as governor, my thoughts turn to a time long ago when I first entered this chamber, January 5, 1959, for my father’s inauguration. I sat there in front of the rostrum, next to my 81-year-old grandmother, Ida Schuckman Brown, feeling awkward in my priestly black suit and Roman collar. My perspective was different then. The previous August, as a young Jesuit living in what was then a pre-Vatican II seminary, I had taken vows of poverty, chastity and obedience. To me, the boisterous crowd, the applause, the worldliness of it all was jarring.
 
 That was 56 years ago, yet the issues that my father raised at his inauguration bear eerie resemblance to those we still grapple with today: discrimination; the quality of education and the challenge of recruiting and training teachers; the menace of air pollution, and its danger to our health; a realistic water program; economic development; consumer protection; and overcrowded prisons.
 
 So you see, these problems, they never completely go away. They remain to challenge and elicit the best from us.
 
 To that end, over the next four years – and beyond – we must dedicate ourselves to making what we have done work, to seeing that the massive changes in education, health care and public safety are actually carried out and endure. The financial promises we have already made must be confronted honestly so that they are properly funded. The health of our state depends on it.
 
 Educating the next generation is fundamental to our collective well-being. An issue that has plagued our schools for decades is the enormous barrier facing children from low-income families. When my father was governor, he sought to remedy the wide inequities among different school districts by calling for equalization of funding. His efforts were not successful.
 
 Now – decades later – we have finally created a much fairer system of school funding, called the Local Control Funding Formula. Under the provisions of this law, state funds are directed to school districts based on the needs of their students. Districts will get significantly more funds based on the number of students from foster care, low-income families and non-English-speaking parents. This program also breaks with decades of increasing centralization by reducing state control in favor of local flexibility. Clear goals are set, and their enforcement is entrusted to parents and local officials. This puts California in the forefront of educational reform.
 
 After years of underfunding and even borrowing from our local schools, the state now has significantly increased its financial support for education. Next year schools will receive $65.7 billion, a 39 percent increase in four years.
 
 The tasks ahead are daunting: making sure that the new system of local control works; recruiting and training tens of thousands of teachers; mastering the Common Core Curriculum; and fostering the creativity needed to inspire students. Teachers need to be held accountable but never forget: they have a tough job to do. They need our encouragement, not endless regulations and micro-management from afar.
 
 With respect to education beyond high school, California is blessed with a rich and diverse system. Its many elements serve a vast diversity of talents and interests. While excellence is their business, affordability and timely completion is their imperative. As I’ve said before, I will not make the students of California the default financiers of our colleges and universities. To meet our goals, everyone has to do their part: the state, the students and the professors. Each separate institution cannot be all things to all people, but the system in its breadth and diversity, through real cooperation among its segments, can well provide what Californians need and desire.
 
 Along with education, health and human services constitute a major part of what state government does. And in the past few years we have made massive commitments in this area, which will require increasing levels of spending, the full extent of which is not yet known. For example, two years ago California embraced the Affordable Care Act, dramatically increasing its health insurance coverage under the Medi-Cal program. The state will enroll 12.2 million people during this new budget year, a more than 50 percent increase.
 
 Providing the security of health coverage to so many Californians who need it is the right thing to do. But it isn’t free. Although the federal government will temporarily foot much of the bill, new state costs – now and more so in the future – will run into the billions.
 
 Another major state responsibility is our system of crime and punishment. And here too, I will refer to my father’s 1959 address. He worried then about California’s “dangerously overcrowded prisons.” He talked about identifying “those prisoners who should never be released to prey again on an innocent public,” but he also said, “we should also determine whether some prisoners are now kept confined after punishment has served its purpose.”
 
We face these same questions today: what purposes should punishment serve and for how long should a person be confined to jail or prison – for a few days, a few years or for life?
 
 In response to a large increase in crimes beginning in the 1970s, the Legislature and the people – through ballot initiatives – dramatically lengthened sentences and added a host of new crimes and penalty enhancements. Today, California’s legal codes contain more than 5,000 separate criminal provisions and over 400 penalty enhancements, an arcane and complex mix that only the most exquisitely trained specialist can fathom. And funding has grown proportionately: during the 1970s we had 12 prisons holding fewer than 30,000 prisoners and corrections spending was only 3 percent of the budget; our system then grew to a peak of 34 prisons, with an inmate population of 173,000, eating up more than 10 percent of our budget dollars.
 
 Four years ago, the United States Supreme Court held that our prisons were unconstitutionally overcrowded and imposed strict capacity limits, far below the number of inmates that were then being held.
 
 Clearly, our system of crime and punishment had to be changed. And through the courts, the Legislature and the voters themselves, a number of far-reaching reforms have been enacted. The biggest reform is our realignment program, which places tens of thousands of lower-level offenders under county supervision. More recently, a federal three-judge panel ordered further measures to reduce prison overcrowding. And the voters, through Propositions 36 and 47, modified our criminal laws to reduce the scope of the Three Strikes law and change certain felonies into misdemeanors.
 
 All these changes attempt to find less expensive, more compassionate and more effective ways to deal with crime. This is work that is as profoundly important as it is difficult, yet we must never cease in our efforts to assure liberty and justice for all. The task is complicated by our diversity and our divisions and, yes, by shocking disparities. Since time immemorial, humankind has known covetousness, envy and violence. That is why public safety and respect for law are both fundamental to a free society.
 
 As we oversee these important changes to education, health care and public safety, we must not lose sight of our long-term liabilities. We have to face honestly the enormous and ever growing burden of the many commitments we have already made. Among these are the costs of pensions and retiree health care, the new obligations under the Affordable Care Act, the growing government costs of dealing with our aging population, bonded indebtedness and the deferred maintenance on our roads and other infrastructure. These specific liabilities reach into the hundreds of billions of dollars.
 
 My plan has been to take them on one at a time. We have now taken steps to deal with the unfunded teachers’ pensions and those of the public employees. For the next effort, I intend to ask our state employees to help start pre-funding our retiree health obligations which are rising rapidly.
 
 We must also deal with longstanding infrastructure challenges. We are finally grappling with the long-term sustainability of our water supply through the recently passed Proposition 1 and our California Water Action Plan.
 
 Equally important is having the roads, highways and bridges in good enough shape to get people and commerce to where they need to go. It is estimated that our state has accumulated $59 billion in needed upkeep and maintenance. Each year, we fall further and further behind and we must do something about it.
 
 So I am calling on Republicans and Democrats alike to come together and tackle this challenge. We came together on water when many said it was impossible. We came together – unanimously – to create a solid Rainy Day Fund. We can do it again.
 
 Finally, neither California nor indeed the world itself can ignore the growing assault on the very systems of nature on which human beings and other forms of life depend. Edward O. Wilson, one of the world’s preeminent biologists and naturalists, offered this sobering thought:
 
“Surely one moral precept we can agree on is to stop destroying our birthplace, the only home humanity will ever have. The evidence for climate warming, with industrial pollution as the principal cause, is now overwhelming. Also evident upon even casual inspection is the rapid disappearance of tropical forests and grasslands and other habitats where most of the diversity of life exists.” With these global changes, he went on to say, “we are needlessly turning the gold we inherited from our forebears into straw, and for that we will be despised by our descendants.”
 
California has the most far-reaching environmental laws of any state and the most integrated policy to deal with climate change of any political jurisdiction in the Western Hemisphere. Under laws that you have enacted, we are on track to meet our 2020 goal of one-third of our electricity from renewable energy. We lead the nation in energy efficiency, cleaner cars and energy storage. Recently, both the Secretary-General of the United Nations and the President of the World Bank made clear that properly pricing carbon is a key strategy. California’s cap-and-trade system fashioned under AB 32 is doing just that and showing how the market itself can generate the innovations we need. Beyond this, California is forging agreements with other states and nations so that we do not stand alone in advancing these climate objectives.
 
 These efforts, impressive though they are, are not enough. The United Nations’ Intergovernmental Panel on Climate Change, backed up by the vast majority of the world’s scientists, has set an ambitious goal of limiting warming to 2 degrees Celsius by the year 2050 through drastic reductions of greenhouse gases. If we have any chance at all of achieving that, California, as it does in many areas, must show the way. We must demonstrate that reducing carbon is compatible with an abundant economy and human well-being. So far, we have been able to do that.
 
 In fact, we are well on our way to meeting our AB 32 goal of reducing carbon pollution and limiting the emissions of heat-trapping gases to 431 million tons by 2020. But now, it is time to establish our next set of objectives for 2030 and beyond.
 
 Toward that end, I propose three ambitious goals to be accomplished within the next 15 years:
 Increase from one-third to 50 percent our electricity derived from renewable sources;
 Reduce today’s petroleum use in cars and trucks by up to 50 percent;
 Double the efficiency of existing buildings and make heating fuels cleaner.
 
 We must also reduce the relentless release of methane, black carbon and other potent pollutants across industries. And we must manage farm and rangelands, forests and wetlands so they can store carbon. All of this is a very tall order. It means that we continue to transform our electrical grid, our transportation system and even our communities.
 
 I envision a wide range of initiatives: more distributed power, expanded rooftop solar, micro-grids, an energy imbalance market, battery storage, the full integration of information technology and electrical distribution and millions of electric and low-carbon vehicles. How we achieve these goals and at what pace will take great thought and imagination mixed with pragmatic caution. It will require enormous innovation, research and investment. And we will need active collaboration at every stage with our scientists, engineers, entrepreneurs, businesses and officials at all levels.
 
 Taking significant amounts of carbon out of our economy without harming its vibrancy is exactly the sort of challenge at which California excels. This is exciting, it is bold and it is absolutely necessary if we are to have any chance of stopping potentially catastrophic changes to our climate system.
 
 California, since the beginning, has undertaken big tasks and entertained big ideas. Befitting a state of dreamers, builders and immigrants, we have not hesitated to attempt what our detractors have called impossible or foolish. In the last four years, in the last 40 years, yes ever since Gaspar de Portola in 1769 marched along the King’s Highway, California has met adversity with faith and courage. We have had setbacks and failures, but always in the end, the indomitable spirit of California has triumphed. Through it all, through good times and bad, California has been blessed with a dynamism and historic trajectory that carries each generation forward.
 
 Whether the early explorers came for gold or God, came they did. The rest is history: the founding of the Missions, the devastation of the native people, the discovery of gold, the coming of the Forty-Niners, the Transcontinental Railroad, the founding of great universities, the planting and harvesting of our vast fields, oil production, movies, the aircraft industry, the first freeways, the State Water Project, aerospace, Silicon Valley and endless new companies and Nobel Prizes.
 
 This is California. And we are her sons and daughters.
 
 Yes, California feeds on change and great undertakings, but the path of wisdom counsels us to ground ourselves and nurture carefully all that we have started. We must build on rock, not sand, so that when the storms come, our house stands. We are at a crossroads. With big and important new programs now launched and the budget carefully balanced, the challenge is to build for the future, not steal from it, to live within our means and to keep California ever golden and creative, as our forebears have shown and our descendants would expect.
 
PROPOSED 2015-2016 STATE BUDGET WILL BE RELEASED FRIDAY 10 AM
    As previously reported by CDCAN, Governor Brown will release his proposed 2015-2016 State Budget on Friday (January 9th) at 10:00 AM in a news conference at the State Capitol in the Governor’s press conference room, Room 1190. 
     In previous years California Health and Human Services Agency Secretary Diana Dooley with department directors including those from the Department of Health Care Services, Department of Developmental Services, and Department of Social Services, have held a conference call open to the public to provide an overview of the proposed budget’s impact on health and human services, including time for questions and answers.  Those calls, begun under former Secretary Kim Belshe under the Schwarzenegger Administration and modelled after the earlier CDCAN Townhall Telemeetings, are usually held later in the day when the Governor’s budget plan or budget revisions are released. No information on any conference call this year has been released yet (CDCAN will issue information as soon as it becomes available). 
    Almost no State Capitol observers expect any major new on-going spending increases for health and human service programs to be included in the Governor’s proposed plan beyond increases linked to caseload growth. As a result, a major battle on several budget issues will likely develop in the coming months as advocates and many legislators press the Governor for more restorations of funding of previous budget reductions including cost of living adjustments for the state portion of the SSI/SSP (Supplemental Security Income/State Supplemental Payment) grants; In-Home Supportive Services (IHSS); regional center funded services for people with developmental disabilities; CalWORKS; child care and development; K-12 education and higher education – while other major issues compete for budget priorities including impact of public employee pensions costs; impact of continued drought, transportation and other critical infrastructure concerns; and how the State’s new “rainy day” fund reserve is calculated.   
 
NEXT STEPS IN BUDGET PROCESS
    The release of the Governor’s proposed 2015-2016 State Budget on Friday (January 9th) is the first step in a long state budget process that continues through late June that runs parallel to the regular legislation session where hundreds of policy bills are considered
JANUARY 2015
    GOVERNOR: proposes 2015-2016 State Budget on January 9th which then requires approval of the Legislature.
    LEGISLATURE: The non-partisan Legislative Analyst Office (LAO) releases before the end of the month an analysis of the Governor’s budget proposals, including his revenue and spending projections.  This analysis is used by legislative budget committees and subcommittees in both the State Senate and Assembly to help provide some guidance in coming up with their own budget priorities.  Both the Assembly and State Senate full budget committees usually hold separate hearings following the release of the proposed budget for an overview of the Governor’s major proposals, spending and revenue projections.  Normally at these overview hearings by the full budget committees no public comments are taken.
MARCH – EARLY MAY 2015
    LEGISLATURE: Beginning in early March (sometimes in late February) are hearings at the State Capitol by Assembly and State Senate budget subcommittees on specific proposals by the Governor in his proposed 2015-2016 State Budget and also on specific issues or concerns that the subcommittees want to focus on or consider possible action on.  Public comments and testimony are taken at these hearings, held through May.  Budget subcommittees during this time period almost never take any actions on major budget issues that are considered “final” and more often leave issues and proposals “open” for later action after the Governor releases his budget revisions in mid-May. 
    A preliminary schedule of hearings is usually released in late February or early March [CDCAN will issue report on hearings as information becomes available].
MID-MAY 2015
    GOVERNOR: Releases – for approval by the Legislature – revisions to his proposed 2015-2016 State Budget – called the “May Revise” or “May Revision” based on the latest available actual spending and revenue figures, including new requirements from the federal government.  In addition the “May Revise” often contains new proposals including those that replace or change previous proposals made in January, or withdraw certain proposals or issues entirely.
    LEGISLATURE: following release of the Governor’s “May Revise”, budget subcommittees will hold a final round of hearings taking action on issues and proposals left “open” from previous hearings in March, April and early May and also will hear, take public comments and take action on new proposals made in the Governor’s “May Revise”.  From there, the budget package – as changed by the Assembly and State Senate budget committees and subcommittees then heads a special budget conference committee composed of equal number of members of both houses to resolve differences between the two budget plans. 
JUNE 2015
    GOVERNOR: At some point in June the Governor will likely begin meeting on a regular basis with the legislative leadership to come to agreement on major budget spending and revenue issues that will ultimately decide what the final budget plan will emerge.  Since the passage of Proposition 25 in November 2010 that allows for passage of a state budget by a majority vote in both houses (though any tax increases would still require 2/3rds vote), and the election of a Democratic governor, Republican legislative leaders have largely been shut out of budget negotiations, with Republican votes no longer needed for passage of the budget and budget trailer bills. 
    LEGISLATURE: A special joint committee called a budget conference committee will begin holding hearings in early June through mid-June to resolve differences between the Assembly and State Senate proposed budget plans.  No public comments are taken at these hearings. How differences are resolved in the budget conference committee, at least for the major budget issues, will be decided ultimately by decisions made outside the conference committee by the Governor and Democratic legislative leadership.  A revised budget plan will then be voted on by both houses on or before June 15th – the State Constitutional deadline to pass a budget – and sent to the Governor (the June 15th deadline doesn’t apply to budget related bills – called “budget trailer bills” that follow the main budget bill to make necessary changes in State law to implement the budget plan). 
JULY 1 2015
    GOVERNOR: Barring a major disagreement with the Legislature’s budget that was sent to him, the governor will likely sign the main budget bill on or before this date – the start of the state budget year. 

 

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