Governor’s May Revise, 2012-13 State Budget
2012-05-14
Governor Jerry Brown this morning announced plans to close the $16 billion state budget deficit through a series of actions ranging from additional cuts, increasing revenues in the November ballot initiative, to other actions including revenue transfers.
Overview
The May Budget Revise addresses the budget deficit by:
Cuts: $8.3 Billion
Taxes: $5.9 Billion
Other: $2.5 Billion
The revised budget includes $8.3 billion in cuts from state employee compensation, welfare, health care, higher education, and other critical government programs.
Without additional revenue, deeper cuts will be required. The Governor has placed an initiative on the November ballot that would raise income taxes by up to 3 percent on the wealthiest Californians for seven years and increase the state sales tax by one quarter of one percent for four years. Consequently, the ballot triggers cuts totaling $6.1 billion that would go into effect on January 1, 2013 if the ballot initiative is not approved by voters.
Specific Transportation Proposals
Revenue Transfer
To help address the General Fund shortfall, the Governor’s May Revision proposes to capture a portion of the new fuel excise taxes resulting from the Fuel Tax Swap that are attributable to off-road fuel uses, and to transfer these revenues to the General Fund.
The amount to be transferred will amount to $184 million in the current year ending in June, 2012, and an ongoing amount of $128 million annually thereafter. These revenues are not protected by Article XIX, but do represent a reduction to overall transportation resources. The Governor’s May Revision does note that the “structural provisions” of the Fuel Tax Swap that provided for the “backfill” of the Prop 42 sales tax revenues will proceed unaffected.
Other Budget Proposals
High Speed Rail Coordination for the North Blended Service - $705 thousand is proposed to be provided to Caltrans to better coordinate development of blended rail service in Northern California.
Capital Outlay Support costs - A proposed reduction of 330 positions ($14.5 million) is included reflecting the close out of ARRA funded projects. This will result in an 89/11 split between state and contractor resources, to provide increased flexibility for Caltrans to adjust going forward as Prop 1B programs begin to wind down.
Additional data provided by Mark Matts, Transportation California. For more on the Govenor's May Budget Revision, click here.