Bloomberg News

Brown Meets Deadline by Signing $85.9 Billion California Budget

June 30, 2011

June 30 (Bloomberg) -- California Governor Jerry Brown signed an $85.9 billion spending plan that relies on economic improvement rather than tax extensions, meeting the state budget deadline for only the second time in a decade.

Brown’s signature means the most-populous state will be able to borrow from Wall Street to fund its operations. It also means lawmakers will be paid again after having their salaries docked two weeks for missing their constitutional deadline.

The budget closes 70 state parks, postpones the opening of two veterans’ homes, strips $1.3 billion from California’s two university systems, delays $3 billion in payments to schools and takes $1.7 billion from local redevelopment agencies, although it doesn’t dissolve them, as Brown had proposed.

“This is an honest but painful budget that returns California’s general-fund spending to levels unseen since the 1970s,” Brown said in a statement sent by e-mail. “We’ve cut our deficit by $15 billion and achieved financial balance this year. This is a huge step forward. But California’s long-term stability depends on our willingness to continue to pay down debt and live within our means.”

Democrats who control the state Assembly and Senate approved the budget June 28 after Brown dropped his plan to raise about $11 billion by extending increases in taxes and fees that expire today.

The revised budget instead counts on revenue beating forecasts by $4 billion as well as additional budget cuts and deferred payments if the money fails to materialize.

Brown’s signature gives the state its first on-time budget since 2006, according to data from the state Department of Finance. California’s general-fund expenditures in 2011-12 will be the lowest since 2004-05, state finance data show.

--Editor: Pete Young, Mark Schoifet

To contact the reporter on this story: James Nash in Sacramento at

To contact the editor responsible for this story: Mark Tannenbaum at

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