Capitol Alert

Gov. Jerry Brown proposed Thursday slashing nearly $1.4 billion in welfare and child care aid for the poor while holding voters liable for $5 billion in education funding with a November tax measure.

The Democratic governor announced his January budget plan this afternoon after his proposal was inadvertently leaked on his Department of Finance website.

He estimates the state faces a $9.2 billion general fund deficit through June 2013, which he proposes to bridge with mostly cuts and taxes. Brown will ask voters to pass a $6.9 billion ballot measure in November that raises taxes on sales and income starting with single filers earning $250,000 a year. The taxes would last through 2016.

"With the tax program, we will eliminate the budget deficit finally, after years of kicking the can down the road," Brown said.

With or without the taxes, Brown is calling for a base level of $4.2 billion in cuts, including the $946 million to welfare-to-work and $446 million to subsidized child care. He also would save $842 million in Medi-Cal by moving recipients into managed care plans.

The welfare cut would save money largely by cutting welfare for parents who don't meet work requirements after 24 months, compared to 48 months now.

If voters approve his tax measure, K-12 schools and community colleges would receive $4.8 billion more than they do in the current fiscal year, for a total of $52.5 billion in state and local tax revenues. Those schools are already owed a significant share of that $4.8 billion under existing formulas and past promises made by state leaders.

If the measure fails, the state would cut that funding. It would provide schools the same amount they receive in the current fiscal year, though districts may have to borrow more money to keep their programs intact, an option many may find difficult. Districts also face growing labor costs each year, while they have already cut school days, laid off teachers and eliminated art and music programs to make ends meet.

If the taxes fail, the state would also cut $200 million each to the University of California and California State University systems, which have relied on large tuition hikes in recent years to offset state budget cuts. Even if the taxes pass, CSU would get no increase in state funding this year; UC would receive $90 million toward retirement costs.

Brown wants the Legislature to enact his social service cuts by March, but Democratic leaders have dismissed his call for early action. Last spring, state tax revenues outpaced expectations enough for Brown and lawmakers to assume nearly $12 billion more than the governor anticipated last January. Democrats do not want to make cuts now, only to find out that tax revenues come in higher again this spring.

"I do not see us taking cut action between now and the May (budget revision)," Senate President Pro Tem Darrell Steinberg, D-Sacramento, said Wednesday. "We've done enough damage on the cuts side. And the cash situation is pretty good. And it isn't like February of 2009 when we were close to heading over the cliff. I just don't see the need to make early cuts."