Governor Brown Signs 2016-2017 State Budget


6-27-2016

SACRAMENTO - Governor Edmund G. Brown Jr. today signed a balanced, on-time state budget that doubles California's Rainy Day Fund, pays down debt, increases school funding and boosts programs to combat poverty and homelessness.

"This solid budget makes responsible investments in California and sets aside billions of dollars to prepare for the next recession," said Governor Brown.

Significant details of the 2016-17 Budget:

Boosting Reserves, Paying Down Debt

In addition to the constitutionally-required $1.3 billion deposit, the budget directs an extra $2 billion contribution into the Rainy Day Fund - bringing the state's reserve fund to $6.7 billion, or 54 percent of the goal. The budget also directs $1.75 billion to the Special Fund for Economic Uncertainties, which also helps the state meet obligations in the face of declining revenue or unanticipated obligations, and pays down debts and liabilities by $1.3 billion from Proposition 2 funds.

Investing in Education

The minimum funding guarantee for K-12 schools and community colleges will grow to $71.9 billion this year, the highest level in state history and a $24.6 billion increase since 2011-12. Per-pupil K-12 funding is increased to $10,643, a $440 increase over last year and a $3,600 increase over 2011-12 levels. This reinvestment continues to help correct historical inequities in school district funding with $2.9 billion in new funding for the Local Control Funding Formula - bringing the formula's implementation to 96 percent complete.

The budget keeps University of California and California State University tuition at 2011-12 levels while providing significant, new one-time and ongoing funding increases.

Counteracting Poverty

This year's budget begins implementing the state's new $15 per hour minimum wage by raising the statewide minimum wage to $10.50 per hour beginning on January 1, 2017. The budget also funds cost-of-living increases for Supplemental Security Income/State Supplementary Payment, the first boost since 2005.

The budget also repeals of the "maximum family grant rule" in CalWORKs, which had denied support to children born to parents who were receiving aid. It also limits the state's asset recovery from the estates of deceased Medi-Cal recipients.

Reducing Housing Costs

The budget reflects $3.6 billion in state and federal funding and award authority for many affordable housing and homelessness programs, including increased funding for CalWORKs rapid rehousing and emergency homeless shelters.

Of this amount, the budget sets aside $400 million in the General Fund for allocation later in the legislative session for affordable housing programs. The funding will be coupled with the Administration's proposed legislation requiring ministerial "by right" land use entitlements for multifamily infill housing developments that include affordable housing. This would help constrain development costs, improve the pace of housing production and encourage an increase in housing supply. In addition, legislation will authorize a $2 billion bond from a portion of future Proposition 63 mental health revenues to develop and administer homelessness and affordable housing programs for the mentally ill.

Strengthening Infrastructure

The budget includes $2 billion for state infrastructure improvements and maintenance, including $1.3 billion General Fund for state buildings, $270 million in lease-revenue bond authority for local jails and $688 million ($485 million from the General Fund) for critical deferred maintenance at levees, state parks, universities and community colleges, prisons, state hospitals and other state facilities.

The budget and related acts signed by the Governor today include:

--SB 826 by Senator Mark Leno (D-San Francisco) - Budget Act of 2016.
--AB 1602 by the Committee on Budget - Education.
--AB 1603 by the Committee on Budget - Public Social Services Omnibus.
--AB 1606 by the Committee on Budget - Developmental Services.
--AB 1607 by the Committee on Budget - Medi-Cal: Hospitals: Quality Assurance Fee.
--SB 827 by the Committee on Budget and Fiscal Review - Budget Act of 2015: Augmentation.
--SB 828 by the Committee on Budget and Fiscal Review - School Finance: Education Omnibus Trailer Bill.
--SB 833 by the Committee on Budget and Fiscal Review - Health.
--SB 836 by the Committee on Budget and Fiscal Review - State Government.
--SB 837 by the Committee on Budget and Fiscal Review - State Government.
--SB 843 by the Committee on Budget and Fiscal Review - Public Safety.
--SB 844 by the Committee on Budget and Fiscal Review - Correctional Facilities: Construction: Financing.
--SB 848 by the Committee on Budget and Fiscal Review - State Employment.

For full text of these bills, visit: www.leginfo.legislature.ca.gov. Additional details on the 2016-17 Budget can be found at www.ebudget.ca.gov.

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