Gov. Jerry Brown offered a lesson in the complexity of government accounting Tuesday, unveiling a revised budget that mutes the impact of a $4.5 billion tax surprise and casts a more worried eye on the impact of the political infighting in Washington, D.C.
"You've read about cash?" asked the governor in a news conference rolling out his updated budget plan (PDF). "Well, cash is money in the bank today."
In short, Brown and his budget team believe much of the unexpected windfall was either a one-time event, or will be diminished by new economic uncertainty that's developed since his original spending plan in January.
"Not a lot of money here, folks," said the governor in a comment that seemed aimed at legislators and interest groups as much as anyone else.
The net new benefit of the $4.5 billion windfall, according to the Brown administration, is about $2.8 billion. And under the complex (and evolving, it seems) constitutional rules known as Proposition 98, an equal amount -- plus an additional $100 million -- will go to public schools.
In total dollars, the revised budget pegs K-12 and community college funding at $56.5 billion for the fiscal year next month, falling to $55.3 billion in the fiscal year that begins July 1.
That decrease is part of the maze of government accounting, where tax dollars must be counted in the fiscal year for which they are believed to have been earned.... and not when they actually arrive in the state treasury. That, in turn, rejiggers the constitutional school funding formulas.
As a matter of politics, declaring that schools are automatically entitled to all of the unexpected cash offers the governor a way out of what could otherwise have been some nasty fights with his fellow Democrats in the Legislature and powerful interest groups. For months, they have been insisting on restoring some of the funding levels for various programs that were cut during the worst of the state's recession.
But schools are immensely popular with voters and have, themselves, been subject to cutbacks. Translation: no real political price to pay for denying those other demands.
That doesn't mean, of course, that advocates for those other services are taking the news lying down.
"The governor's proposed budget would continue steep cuts to Medi-Cal benefits and provider rates, and undermine California's safety-net," said Anthony Wright of the advocacy group Health Access.
Also unimpressed: California's chief justice, who has lobbied for relief from hundreds of millions of dollars in cuts to judicial and trial court funding.
"I had hoped for more effort to help stop the downward spiral of the judicial branch budget," said Chief Justice Tani Cantil-Sakauye in a prepared statement.
Of course, the legal mandate for school funding isn't just unrestricted cash to mend the tatters in education finances. The governor's plan seeks to earmark $1 billion of the unexpected cash being sent to schools for implementing what's known as Common Core -- a set of English and math standards being phased in across all grades by 45 states, including California.
But generally, Brown's revised budget only offers new spending where it seems unavoidable -- costs that have come in higher, previous savings hopes subsequently blocked by the courts, and expenses that the feds have stopped covering under sequestration.
The sequestration fight, in particular, is notable. His advisers point to the restoration of the federal payroll tax as a negative on the state's economy and, thus, fewer tax revenues in the near future.
And the governor, who relishes his reputation as personally and professionally frugal, again used the budget process as a platform for lowering the expectations of those in the Capitol who want more.
"That's what this place is, it's a big spending machine," said Brown to reporters. "Well, I'm the backstop."