Top Assembly Democrats have revealed what they'd like to do with billions of dollars in extra tax revenue that the state is projected to receive, and their top priorities were reassuring: expanding the reserve fund and paying down the debts that Sacramento accumulated over the last decade. Their budget blueprint also calls for a lot of new spending on education and anti-poverty programs, however. If state government really has entered a sustained period of large surpluses, lawmakers can afford to make more long-term investments in California's infrastructure and its people. But that's a big if.
Released by Speaker John A. Pérez (D-Los Angeles) and Assembly Budget Chairwoman
That's just a prediction, and lawmakers know all too well how quickly the state's finances can shift from boom to bust. The blueprint starts by calling for Sacramento to build up $8 billion in reserves — roughly five times the amount in the most recent budget — within three fiscal years. Some of that money would be used to pay debts state government racked up to make ends meet, and some to address unfunded retiree obligations. The rest would go into an expanded rainy-day fund designed to buffer the state against the gyrations in revenue.
The other half of the blueprint would boost spending on higher education and on nutrition, health, job training and other anti-poverty efforts that lawmakers slashed in recent years. Rather than simply restoring funds that had been cut, the blueprint wisely advocates new approaches that could yield a better return on the investment. All the same, it would be premature to make major new commitments before the state's finances are more certain and its huge unfunded liabilities are reined in. And if we do wind up with more to spend, some portion should go to improving the business climate and growing the economy faster.