Governor Jerry Brown: “The deficit is gone.”
Mr. Brown was not just talking about a balanced budget. He projected that the state would begin posting surpluses starting next year, leading to a projected surplus of $21.5 million by 2014, a dramatic turnaround from the deficit of $26 billion — billion, not million — he faced when he was elected in 2010.
The governor said California’s finances were strong enough that he wanted to put aside a $1 billion reserve fund to guard against future downturns, and included in the budget sharp increases in aid to public schools and the state university system, both targets of big spending cutbacks.
The change in fortunes reflected cuts that were imposed over the past two years, a temporary tax surcharge approved by voters in November that expires in seven years, and a general improvement in the state’s economy…
Democrats now control two-thirds of the Assembly and Senate, and some of them have talked about restoring at least some of the social service cuts, like dental care for the poor, that were imposed to bring the state to this point, Mr. Brown said he understood the impulse to repair broken social services, but he warned against returning to a boom-and-bust pattern of spending during the good years, only to later struggle through debt.