Majority Democrats Reject Governor's Budget Proposal, Approve $3 Billion Spending Increase

Action Risks State's Credit Rating
Friday, May 23, 2014

Ignoring a warning by Standard & Poor’s credit rating agency to budget conservatively, the Democrats on the Senate Budget Committee used overly optimistic revenue projections in its deliberation on the state’s spending plan today. By using the more positive numbers, the Democrats approved at least $3 billion more in spending than the Governor’s budget proposal.

“The Legislature recently approved and sent to the voters a bi-partisan Constitutional Rainy Day Fund to save money in good economic times in order to prevent deep cuts to the poor, blind and disabled during bad economic times,” said Senator Jim Nielsen (R-Gerber), the lead Republican on the committee.

In his opposition to the increased spending, Senator Nielsen said, “Californians want us to use the surplus to pay down debt, not fund new programs. The choice is clear – and with one-party rule the choice is the Democrats. Stay the course of balanced budgets or risk ruining our credit again and plunging California back into deficits. Today, they’re making the wrong choice.”

California has received one-time “windfall” revenues this year as a result of the temporary tax increases that will allow the Legislature to stabilize the state’s finances and pay off debts. By rejecting the governor’s balanced approach, the Budget Committee’s actions today to increase spending will put the state’s credit at risk.

Senate Republican Leader Bob Huff (R-Diamond Bar) added, “Seventy-four percent of likely voters favor the bipartisan Rainy Day Fund ballot measure – which Republicans have called for repeatedly over the years. But now, before the voters even have a chance to approve it on the ballot, Democrats want to repeat the past mistakes that led to a decade of budget deficits. It’s a stunning display of fiscal irresponsibility.”

The lead budget designees of the Senate and Assembly Budget committees will meet next week to finalize a budget agreement for legislative approval, which must be done by June 15. It then goes to the Governor for final action and must be signed into law by June 30.