Jerry Brown rolls the dice with pain-filled budget plan for California

Gov. Jerry Brown took a major gamble in the budget plan he unveiled Monday, proposing deep cuts to nearly all state programs while betting that Californians would agree to extend a trio of recent tax hikes in a spirit of shared sacrifice.

Under what the governor characterized as an “honest” budget, taxpayers would be asked to dig deeper into their pockets — after the state’s welfare program is cut in half, $1 billion is trimmed from its universities, and tens of thousands of elderly and disabled residents lose access to care at home.

Only elementary and secondary schools would be spared the knife, having already been wounded deeply, Brown reasoned. But he warned that unless the tax increases continue for five years, teachers and students might lose that protection.

“We’ve had 10 years of gimmicks and tricks,” he said. “All of that puts us in a mess. It’s not honest, and we are now going to make it transparent as possible…. It is better to take our medicine now and get the state on a balanced footing.”

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Brown put his plan on the table at a time when state government is hamstrung, short on cash and limited in its choices. Fellow Democrats and entrenched interests who for years have fought some of the same cuts and taxes seemed to acknowledge that if Brown fails, the consequences will be dire.

Senate President Pro Tem Darrell Steinberg (D- Sacramento), who bitterly resisted similar reductions proposed by former Gov. Arnold Schwarzenegger, exhibited a different outlook Monday.

“I hate the cuts, but I am not going to reject the cuts,” he said.

Union members who fought similar cuts in recent years also seemed resigned.

“We’re feeling a little better about this budget,” said Barbara Blake, a registered nurse and state secretary of the United Nurses Assn. of California.

Brown still has a tough sell ahead: Republicans may not provide the votes needed to put the tax package on the ballot. Assembly minority leader Connie Conway (R-Tulare) objected that Brown’s plan contains “the same tax increases that voters overwhelmingly rejected less than two years ago.”

Voters declined then to renew the elevated taxes, which expire this year.

The 72-year-old governor, who first held the job 36 years ago, pitched his austerity plan as the way to halt the state’s careening from one fiscal crisis to another. The linchpin of his proposal is a June special election on the tax issue.

He wants his proposed cuts enacted before then — a move that could give some comfort to voters who believe that Sacramento wastes too much of their money. Californians crushed Schwarzenegger’s 2009 effort to prolong higher taxes by a vote of nearly 2 to 1.

To sweeten the deal this year, Brown pledged to decentralize power from Sacramento. But he offered no alternative plan in the event that the Legislature declines to put the five-year tax extension on the ballot or voters say “no” again.

“Some people might say I am putting a gun to their head,” Brown said.

Later, he said that if the taxes are not renewed, “multiply by two” the cuts already in his plan.

Except for the sparing of schools, whose teachers union spent millions helping to elect Brown last year and is expected to campaign for the tax extensions, the $84-billion general fund plan echoes many of Schwarzenegger’s recent budget proposals. It would reduce healthcare for the poor. State park hours would be reduced.

But Brown would take nearly 20% from public universities, which Schwarzenegger’s last budget protected after years of deep cuts. The new governor would also reap considerable savings by eliminating some business subsidies and tax breaks that Schwarzenegger worked to protect, but those billions would not be enough to shield Californians from tough sacrifices.

If a tax extension is approved, Brown promised, he will hand money and responsibility for programs such as foster care, mental health and child welfare back to local officials, whom voters tend to trust more. Brown hopes his restructuring plan can restore some confidence in California government among voters but also the financial markets that have punished the state with the nation’s worst credit rating.

“Government will be closer to the people,” Brown said Monday.

Local officials, however, fear they will be left saddled with programs that they can’t afford.

“We have a trust problem with the state,” said Los Angeles County Supervisor Zev Yaroslavsky.

And some Republicans accused Brown of using the same “smoke and mirrors” in his accounting that the governor has vowed to end. For instance, Brown’s budget counts as a cutback a complex gasoline-fee change that would have little effect on state services but save $1 billion on paper.

The governor also proposed to sweep up $1 billion from a voter-approved cigarette tax that funds early childhood programs. That move would also go on the June ballot; voters rejected a similar measure in 2009.

Meanwhile, Brown would drop roughly 115,000 families from welfare rolls, and those still receiving benefits would get smaller grants. Foster children’s access to transitional housing after they turn 18 would be curbed. And state subsidies for in-home domestic services for some aged, blind and disabled Californians would be eliminated.

Services for nearly 250,000 developmentally disabled people would be trimmed by $750 million. Brown would also shutter the state’s 330 adult day health centers that serve 27,000 low-income people to save $195 million.

The $500 million cutbacks to the University of California and California State University systems — roughly 20% each — would come after tuition has skyrocketed, faculty have been furloughed and course offerings have been reduced.

“We will be digging deep into bone,” UC President Mark Yudof wrote in an open letter to Californians on Monday. “The physics of the situation cannot be denied — as the core budget shrinks, so must the university.”

To emphasize his message of shared sacrifice, Brown announced last week that he would cut the governor’s office budget by 25%.

Although Schwarzenegger often insulated businesses from budget pain, Brown did not. He proposed to dismantle the state’s network of redevelopment agencies that use tax subsidies to improve blighted neighborhoods; the savings to the state would be $1.7 billion.

Brown would also do away with two other business-friendly tax provisions worth nearly $2 billion combined.

Given GOP opposition to tax hikes, there have been whispers in Sacramento for weeks about Brown and Democrats using an obscure state law to bypass the necessary two-thirds threshold — and thus the need for Republican support — to place the tax question on the ballot.

Brown said Monday it would be “much better if this is a bipartisan effort” but left the door to such a maneuver open.

shane.goldmacher@latimes.com

Times staff writers Jack Dolan, Patrick McGreevy, Michael J. Mishak and Anthony York contributed to this report.