COUNCIL PRIORITIES FARE WELL IN PROPOSED STATE BUDGET

The Bay Area Council reacted generally favorably to the proposed 2016-17 state budget that Gov. Jerry Brown unveiled yesterday (Jan. 7). Here is a quick analysis of how the Governor’s proposed spending plan impacts some of our lead policy priority areas.

Water and Natural Resources
The Natural Resources Agency, which manages much of the state’s water, environment and fire protection activities, is pegged for $2.9 billion, a 6.6 percent boost from the previous year’s budget. Big winners include one-time expenditures for emergency drought response ($323 million); fire protection ($77 million); and $150 million from cap and trade revenues for water and energy efficiency programs, wetlands and delta habitat restoration program, and urban greening.

Transportation
The budget includes total funding of $16.2 billion for transportation programs, with a continued focus on raising new money for highway repairs and maintenance. The revenues will be split evenly between state and local transportation priorities, and raised from several sources including a new road improvement fee on all vehicles, a continuation of the gasoline excise tax, an 11-cent increase in the diesel excise tax, cap and trade proceeds, and cost-saving efficiency improvements to Caltrans. In addition to highway repairs and local road maintenance, the budget allocates resources to a new Low Carbon Road Program for projects that encourage active transportation, transit capital investments that provide greenhouse gas reductions, and projects that strengthen the state’s major trade corridors.

Workforce and Higher Education
Gov. Jerry Brown proposed spending more than $270 million on improving the performance of California’s workforce training programs in his proposed budget yesterday, providing a boost to the Council’s efforts to strengthen regional workforce pipelines—and better connect training programs with the needs of employers. The proposed budget also keeps tuition flat at the University of California and California State University systems, increasing core funding by 4.6 percent at CSU and 5.4 percent at UC.

Council President and CEO Jim Wunderman issued the following statement on the Governor’s proposed budget:

“California is enjoying an El Nino of economic resurgence that is filling state coffers. Gov. Brown has presented a budget that reflects that largesse while also recognizing that we must be prepared for an inevitable downturn. We applaud the Governor’s continuing vigilance in controlling spending and focusing investments in areas critical to sustaining our nation-leading economic growth, including transportation and higher education. There is more work to be done to make sure we are investing in the foundational areas of our economy, including rebuilding and improving our beleaguered and badly underfunded transportation system. California also still relies heavily on volatile income taxes, for which the Bay Area contributes a disproportionately high level compared with other regions of the state.

We look forward to working with the Governor, his administration and the Legislature in the coming weeks and months to ensure California’s spending is focused on those areas that will help sustain healthy, balanced and long-term economic growth. That includes continuing our work with groups like The Fix Our Roads Coalition to secure the funding California so badly needs to repair our roads and highways.”