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budgetjerrybrown.JPGGov. Jerry Brown released a revised, $156.2 billion budget plan Tuesday, proposing to spend the bulk of a state windfall to cover vastly expanded rolls in the state's Medi-Cal program.

The May revision reflects the state's best projection of revenues for the coming fiscal year and touches off a rush of budget negotiations at the Capitol ahead of the adoption of an annual spending plan in June.

The budget replaces a $154.9 billion spending plan Brown proposed in January. It included modest increases for social service programs, but also billions of dollars to address long-term debt.

Brown's new plan says 1.4 million more people than projected in January signed up for Medi-Cal under the Obamacare roll out this year, which will cost the state about $1.2 billion more than the governor's predicted five months ago.

Brown's budget also confirmed that state revenue had grown enough to trigger a 2 percent pay increase for most state employees beginning July 1. Brown and 14 of the 21 bargaining units agreed to contracts that included the triggered pay hike. The budget projects that the raise will cost $183.7 for the fiscal year, $90.3 million of it from the general fund.

Brown's budget plan also includes $142 million to cover expenses from the ongoing drought.

The spending plan also lays out a 30-year road map to pay off the unfunded $73.7 billion liability in the State Teachers Retirement System by asking the state, school districts and teachers all to increase annual contributions.

After releasing the budget plan at a Capitol news conference Tuesday morning, Brown, who is running for re-election, was scheduled to hit the road to promote the plan in Los Angeles and San Diego.

The revised budget's release follows the announcement last week that Brown and legislative leaders had reached agreement on a major component of the annual spending plan, a rainy-day fund measure that, if approved by voters, would set aside 1.5 percent of general fund revenue every year, plus revenue from capital-gains taxes in especially lucrative tax years.

The measure would replace a reserve measure already on the Nov. 4 ballot but criticized by public employee unions and, in recent weeks, Republicans who acknowledged problems with its wording.

Brown has remained cautious about spending despite improving revenue estimates. The nonpartisan Legislative Analyst's Office reported Sunday that revenue for the current budget year from the largest general fund sources - personal income, corporation and sales taxes - was coming in about $1.8 billion above projections through the end of April.



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