(January 11, 2011) Governor Jerry Brown yesterday proposed his 2011–12 budget to close the estimated $25 billion budget deficit the state faces. The proposed budget calls for $12.5 billion in spending cuts, a realignment of responsibility and spending back to local governments and a temporary extension of taxes.

California Chamber of Commerce President and CEO Allan Zaremberg commented, “We appreciate Governor Brown’s frank assessment of the situation California faces. As we delve into the details of what the Governor has proposed, we will need to carefully weigh the cumulative impact of the budget proposals against their impact on the economy. We must remain focused on California’s need for continued investment in private sector job growth, since private sector job creation is the key to long-term budget solvency.”

Below are some excerpts from the Governor’s office statement regarding the budget proposal:

“'These cuts will be painful, requiring sacrifice from every sector of the state, but we have no choice,’ Brown said. ‘For 10 years, we’ve had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth.’

“Brown’s budget also calls for temporary continuation of taxes while the state pays off debt, moves forward with his realignment plan and consolidates or eliminates functions.
…
“The Governor said his realignment plan, which he called ‘vast and historic,’ will return decisions and authority to cities, counties and schools and ‘allow government at all levels to focus on core functions and become more efficient and less expensive’ by reducing duplication of services and administrative costs.

“The one area of state spending spared from cuts is kindergarten through 12th grade education.
…
“The revenue component of the budget calls for an election this coming June where voters will be asked to continue current personal income and sales taxes, as well as the Vehicle License Fee rate, for five years. Brown said revenue from the sales tax and the vehicle license fee will be transferred directly to local governments to finance the first phase of his realignment plan.
...
“Brown called the spending plan ‘a tough budget for tough times’ that will close the state’s structural deficit and provide a ‘strong and stable foundation’ to meet future needs.”

To view the entire budget proposal, click here.

To view Governor Brown’s budget briefing, click here. 

Staff Contact: Marc Burgat