This publication is our office’s initial response to the 2016–17 Governor’s Budget proposal, which was presented to the Legislature on January 7, 2016.
Significant Increases in Revenues and School Funding. The administration’s revenue estimates for 2015–16 and 2016–17 are billions of dollars higher than they were in last year’s budget act. Higher revenues generate significant increases in Proposition 98 funding—$4.3 billion over the 2014–15 through 2016–17 period. After satisfying Proposition 98 and Proposition 2 requirements and funding adjustments to existing programs, the Governor’s plan allocates about $7 billion in discretionary General Fund resources.
Governor’s Budget Prioritizes Reserves and Infrastructure. As shown in the figure below, in allocating discretionary resources for the 2016–17 budget, the Governor prioritizes reserves. Specifically, he proposes increasing total reserves to more than $10 billion. He allocates most other discretionary resources to one–time infrastructure spending. Outside the General Fund, the Governor plans to: (1) spend $3.1 billion cap–and–trade auction revenues, (2) provide additional revenues for transportation, and (3) extend the managed care organization (MCO) tax.
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