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Local legislators applaud stronger Rainy Day Fund in state budget
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California's multi-billion dollar deficit will be completely eliminated by 2018, according to the May budget revision of Gov. Jerry Brown's state budget released on May 13.

Based on the governor's January budget proposal, the May revisions include providing health care to millions of more Californians, paying down $11 billion in debt, and fully funding the teachers' retirement system over time.

"This May revision is good news for California," said Gov. Brown. "It shows that California can afford to provide health care to many more people, while at the same time paying its debts and shoring up the long troubled teachers' retirement system."

The revisited budget comes alongside an agreement made between legislative leaders of both parties and Brown to bring greater financial stability for the state in the years to come by expanding the proposed Rainy Day Fund plan. Allowing the state to save for the future while paying down debts and any unfunded liabilities, the Rainy Day Fund plan was approved by legislation on Thursday, and is expected to go before voters in November.

Furthermore, the May Revise reflects more than $2 billion in added costs over the originally proposed January budget, including higher spending to provide health care coverage for a million more people under Medi-Cal, emergency drought assistance, increased funding to meet the Proposition 98 guarantee for K-14 schools, caseload increases in the state's in-home supportive services program, additional contributions to the California public employee's retirement system, better known as CalPERS, and additional staffing to administer the state's unemployment insurance program.

Upon Gov. Brown's return to office in 2011, California faced a substantial $26.6 billion budget deficient, in addition to estimated annual shortfalls of roughly $20 billion. Built up over the past decade, these deficits are now set for complete elimination using a combination of budget cuts, temporary taxes and the recovering economy.

With the Rainy Day Fund gaining the support of both Democrats and Republicans, who had called for an expanded plan in response to the Governor's January budget proposal many legislators across the state have expressed approval of the May Revise.

"The governor's revised budget shows necessary restrain in spending allowing us to continue to pay down debt. As we see our revenues rise, we must remain focused in addressing our long term challenges," said Senator Anthony Cannella, R-Ceres. "I applaud the Governor for highlighting our unfunded is our responsibility to address this issue now so that our next generation does not have to pay for our inability to spend within our means."

Assemblywoman Kristin Olsen, R-Modesto, was also pleased to see a stronger Rainy Day Fund included in the May Revise, although expressed disappoint with Gov. Brown for "not addressing other important priorities."

"While I'm very pleased that our negotiated Ray Day Fund is included in the Governor's revised budget, I was surprised and disappointed that he didn't address other important priorities - water storage and drought relief, higher education, and other investments to help grow our economy," said Olsen. "Reserve savings alone will not revitalize our state, we must invest in our infrastructure and in the education of our youth in order to grow jobs and opportunities that will allow us to reclaim our stats as the Golden State."

State Senator Tom Berryhill, R-Twain Harte, a member of the Senate Budget Committee, said he appreciates Brown's spending restraint but cautions that his legislative colleagues may be playing on a different field.

"There is no surplus in California's so-called surplus," said Berryhill, a former Ceres resident. "Last week's report by the Legislative Analyst Office pretty much lays it out - we are in deep debt down the road - yet, I hear calls from my legislative colleagues for more spending on almost every program in the budget ... the last thing we need is more spending adding to the real crisis that will occur 10 to 20 years from now, when our kids are saddled with crippling debt."

Key points in the Revise:

• Proposes a plan of shared responsibility among the state, school districts and teachers to strengthen the State Teachers' Retirement System, The increased contributions in the first year from all three parties total about $450 million, but would grow thereafter to more than $55 billion annual in 2020-21.

• Implements federal health care reform. Compared to what was projected in January budget, 1.4 million more people will be covered through Medi-Cal, at a cost of an additional $1.2 billion. Enrollment is now expected to rise from 7.9 million in 2012-13, to 11.5 million in 2014-15.

• Provides an additional $142 million in drought related expenditure on firefighting, emergency response, water management, wildlife preservation and food assistance. (121 million General Fund)

- Paying down debts and liabilities. Proposed to reduce the Wall of Debts by more than $11 billion this year alone and fully eliminate it by 2017-18. This budget will completely pay off all remaining deferrals to schools and the Economic Recovery Bonds this year., and includes an additional $100 million to repay a portion of exiting mandate reimbursement claims that have been owed to local government since at least 2004.