Deukmejian Proposes $39.05-Billion Budget

Gov. George Deukmejian today proposed a no-growth, $39.05-billion state budget that would cut spending on state health programs to free more money for prisons, colleges and public schools.

The spending plan for the fiscal year beginning next July 1 projects an overall increase of 1.8% from the current budget year, compared to an anticipated inflation rate of 4% during 1987 and 4.6% in 1988.

It would increase state support of local schools by 2.1%, to $11.7 billion; hike annual spending on state prisons by 10.3%, to $1.4 billion; cut Medi-Cal by 0.5%, to $4.9 billion, and set aside $109 million for a 3% increase in pay and benefits of state employees.

Largest Share for Education

Education would continue to get the biggest share of the state budget, with $17.3 billion earmarked for schools from kindergarten through the University of California, followed by $9.4 billion for health and welfare programs and $3.2 billion for highways and other transportation programs.

Under the 1,228-page spending plan, which the Legislature will have five months to review and amend before returning it to Deukmejian for his signature, prisons will continue to be one of the fastest growing budget items, up $131 million, to $1.4 billion, as the state anticipates an additional 8,000 inmates to house in the coming year.

The personal income tax would continue to be the biggest source of state revenues, expected to raise $13.2 billion in the new fiscal year, followed by the sales tax, $10.9 billion, and the bank and corporation tax, $4.6 billion.

Unspecified Reforms

Finance Director Jesse Huff said despite estimates that the number of Californians eligible for state-paid Medi-Cal benefits will increase by 1.2%, to 3.05 million recipients, Deukmejian is budgeting a Medi-Cal reduction of $27.6 million, or 0.5%, to be achieved from unspecified reforms.

“We do not have a concrete (Medi-Cal) proposal today,” Huff said, describing the budget estimates as a goal for a planned cost-control reform that is still to be drafted.