The budget continues Governor Brown’s policy of fiscal restraint. While the General Fund expenditures increased by nearly $8 billion dollars over last year’s Budget Act, the Governor has ensured the state starts preparing for future economic downturns with a $6 billion reserve.

The revenues show that California’s economy is improving, but growth still remains limited primarily to some of our coastal communities.  The Bay Area—representing only 19 percent of the state’s population—accounts for 52 percent of the net employment growth since 2007 and in the most current year’s data available, 39 percent of all personal income tax revenue.  We are a state with an economy and a budget still too precariously balanced on the continued well-being of one region and to a large extent one industry in that region.

The next 90 days of our legislative session will determine if the state can hold to the balanced fiscal approach the Governor has championed in this budget.  The challenge is to ensure that the major policies under debate in the Legislature strengthen our jobs climate and set the base for long-term revenue stability, not just add more costs and more taxes that will only delay or reverse our economic recovery and continue to add to the high cost of living in our state.