Gov. Brown releases $164.7-billion budget plan, calls for restraint

Reporting from Sacramento —  Four days after taking the oath of office for the fourth time, Gov. Jerry Brown released his $164.7-billion budget proposal on Friday morning in the Capitol.

Once again, Brown called for fiscal restraint, warning that even with a rebounding economy and balanced budget the state faces billions of dollars in liabilities, including the costs of state retiree healthcare.

“Now we have a carefully balanced budget, more precarious than I’d like, but it is balanced,’’ Brown said at a morning news conference at the Capitol. “It’s not a time for exuberant overkill on our budget spending.’’

Among the most notable aspects of the governor’s proposed budget was what was missing. The spending plan did not set aside funds for providing Medi-Cal for undocumented immigrants, a proposal under consideration in the California Legislature.

The proposal does not include an extra $100 million that the UC Regents say is necessary to avoid a tuition hike. Instead, Brown said his administration will work with university leaders to “reduce the costs structure.’’

Brown’s proposed budget also lacks funding for a major overhaul of state roadways and pressing other infrastructure needs in the state. Brown did say, however, that he will work with Democratic and Republican leaders in the Legislature to craft a plan to address those needs.

The proposal includes $113.3 billion in general fund spending, plus $45.5 billion from dedicated funds and $5.9 billion from bonds.

There’s good news for public education, and Brown’s proposal includes a $2.5-billion funding increase for schools and community colleges, the result of higher-than-expected tax revenue.

However, the spending blueprint is likely to continue a standoff over tuition at the University of California. Instead of providing the funding the regents say is necessary to avoid a tuition increase, Brown includes his original offer of a $120-million bump, and only if student prices don’t increase.

“I think the university can be a fine university living within the funds that we’ve appropriated,” Brown said.

Although revenue has been stronger than expected, California is wrestling with the increased cost of providing healthcare to the poor. Medi-Cal enrollment has jumped 50% in recent years, and the program is expected to cover one-third of the state’s population.

Brown rebuffed criticism that the state has not done enough to assist Californians living in poverty. The governor said providing healthcare to those in need, through Medi-Cal, is an essential ingredient to lifting people out of poverty. He added that a third of his proposed general fund budget goes to programs that assist low-income Californians.

“California does more than most states,” Brown said.

California is also facing higher costs for providing healthcare to retired state workers, one of the state’s long-festering financial problems. Last year officials estimated the bill at $71.8 billion.

Brown previously said he would ask state workers to chip in more for the benefit, but he hasn’t provided more specifics yet.

Brown said he would negotiate with unions and ask for larger contributions to help pay for the benefits. The state also would chip in more over the course of the 30-year plan.

Follow @chrismegerian for more updates from Sacramento