On Thursday, January 9th Governor Brown announced a proposed balanced budget that pays off more than $11 billion in debt and builds a lasting rainy day fund while continuing to invest in public schools and expand health care coverage for millions.
“With a decade of intractable deficits behind us, California is poised to take advantage of the recovering economy and the tens of thousands of jobs now being created each month,” said Governor Brown. “But given the vagaries of the business cycle, we must be ever vigilant in the commitment of public funds. Wisdom and prudence should be the order of the day.”
Some key pieces of the Budget include the following:
- Strengthening the State’s Infrastructure – The Budget reflects the release of the state’s five-year infrastructure plan – last produced in 2008 – and includes an $815 million package of investment to address critical deferred maintenance projects in state parks, on highways, local streets and roads and at K-12 schools, community colleges, courts, prisons, state hospitals and other state facilities.
- Investing in Education – The Budget also provides the second year of guaranteed increases in funding of $142.2 million each for the University of California and the California State University systems – predicated on a continued freeze on increases in student tuition and fees.
- Economic Development Initiative – The Initiative allows California to be more effective at stimulating economic growth and creating new jobs. The program is designed to allow small businesses to easily obtain the manufacturing sales tax exemption, and dedicates a portion of the hiring credit and the incentive fund solely to small businesses. The Governor’s Economic Development Initiative creates three new tax incentives:
- The New Employment Credit is focused on specific areas that have high unemployment and poverty rates. This credit will be available for the hiring of long‑term unemployed workers, unemployed veterans, ex‑offenders previously convicted of a felony, recipients of the federal Earned Income Tax Credit, and people receiving public assistance.
- An upfront sales tax exemption for manufacturing or biotech research and development equipment purchases valued at up to $200 million per business.
- The California Competes tax credit will be administered by the Governor’s Office of Business and Economic Development, which will negotiate agreements to provide businesses tax credits in exchange for investments and employment expansion in California.
Governor Brown will hold a private meeting today, January 14th with local education, water, agriculture, law enforcement and community leaders in Riverside at the Riverside County Office of Education.
To read the full press release announcing the Governor’s Proposed 2014-15 Budget, click here.
The full summary of the Governor’s Budget Proposal can be viewed at www.ebudget.ca.gov