It's not the long-term investments in anti-poverty programs that liberal lawmakers have been pushing for, but Gov. Jerry Brown does want to use an unexpected $8 billion in projected revenues to tackle some of California's most intransigent problems, including helping cities combat homelessness and mental illness and investing in crumbling infrastructure.
A relaxed Brown appeared before reporters Friday morning to unveil his final budget proposal, a revision of his January plan for the fiscal year that begins July 1.
He repeated a now-familiar refrain, warning that the state's nearly decade-long economic expansion will eventually end -- and making clear that his priorities include growing the state's so-called rainy day fund to a record $13.8 billion and investing extra money in one-time expenditures, not ongoing spending.
"I am trying to leave the most responsible budget I can to the next governor, so I am going to be reluctant to embark upon programs that will continue and grow into the future," Brown said. "They all have merit to them, but we are already overextended -- it's hard to believe when we have so much money in the bank, but we are."
Brown spoke as he stood between familiar charts laying out the history of economic downturns and the massive growth that programs such as public education and Medi-Cal, the state's health insurance for the poor, have enjoyed under his watch.
"As you know we are nearing the longest economic recovery in modern history and as Isaac Newton once observed, what goes up must go down," Brown said. "It's time to save for the future -- as I've said before, and I will say again: Let's not blow it now."
But in a nod to legislative Democrats' focus on income inequality, Brown is expanding the state’s Earned Income Tax Credit program to include workers between the ages of 18 and 25, and above 64. The income limits tied to that tax credit are also being increased to reflect the state's minimum wage increase to $12 an hour in 2019.
Brown didn't cave on one of Senate Democrats' big priorities: increasing the grant levels for the state's welfare-to-work recipients. But he said he will "take a look at what the Legislature proposes" in the coming month.
Assembly Republican leader Brian Dahle agreed more money should go into the state's rainy day fund. He said he'd also like to see some go toward infrastructure.
"And obviously we should give some of it back to the taxpayers," Dahle said. "You know once the government gets a hold of our money, it's really hard for them to let go of it."
The governor is proposing putting about $4 billion of the surplus into one-time expenditures, including $2 billion to help state universities, facilities and courts tackle years of deferred infrastructure maintenance. Some of that money would also go to flood control needs, such as shoring up levees.
The governor also wants to send $359 million to local governments to address homelessness, and use $312 million for mental health screenings and the education of mental health professionals. Those are one-time expenditures aimed at bridging a gap until money from a new fee on real estate transactions and other money materializes.
Brown noted that many of the state's biggest-ticket items have grown substantially over his eight years in office.
Spending on K-12 schools and community colleges has ballooned from $47.3 billion in his first year in office to a proposed $78.4 billion next fiscal year. That's an increase of $4,600 in per pupil spending since he took office.
"No state comes close to us on health care and education spending," the governor said.