SACRAMENTO — Gov. Jerry Brown, dismissive of a surge in state tax revenue that stirred optimism at the Capitol, moved Tuesday to blunt appeals for increased spending, downgrading his budget proposal from January.
The budget revision an annual exercise opening a month of negotiation with the Legislature threatened to strain Brown's relationship with Democratic lawmakers and with social service advocates who called his estimates overly conservative and who are lobbying to restore programs cut during the recession.
"He's definitely trying to strike a tone," said Jeffrey Michael, director of the Business Forecasting Center at the University of the Pacific.
Tuesday's proposal holds more, however, for schools. In his revised proposal, Brown stands behind his Local Control Funding Formula that would sweep away decades of outdated formulas and added pockets of restricted funding.
The Central Valley stands to gain from a boost to the state average on base funding by grade, with extra dollars to help low-income students and English-language learners.
"I'm pleased that Governor Brown is standing his ground on the proposed overhaul of our education finance system," Patterson Unified School District Superintendent Philip Alfano said. Patterson stands to gain plenty from the proposal, as does Ceres.
"It clearly is harder to educate these students," said Ceres Unified School District Superintendent Scott Siegel. He noted that valley legislators, Republicans and Democrats, back the proposal, but lawmakers from coastal areas, which traditional get higher funding, are seeking to delay or change it.
Additional money for new textbooks or e-books and training for teachers in the new Common Core standards is in Tuesday's proposal, Siegel said, while a plan to move adult education to junior colleges is gone. The GED prep and English instruction held at neighborhood schools "are really more our wheelhouse than Modesto Junior College's wheelhouse," he said.
Despite income tax revenue running about $4.5 billion ahead of expectations through April, Brown said much of that money is unlikely to carry over into future years. He projected revenue for next fiscal year down $1.8 billion from his January estimate.
The Democratic governor said economic growth will be slower than he previously thought because of federal spending cuts and a higher payroll tax on workers.
"Four percent growth has now become 2 percent growth," Brown said.
He said much of the income tax revenue increase the state enjoyed this spring will not be lasting, attributing the rush instead to wealthy taxpayers shifting income from 2013 into 2012 to avoid higher federal tax rates. Administration officials said they expect tax revenue in the final two months of the budget year May and June to fall below original estimates.
Republican lawmakers immediately praised Brown. Assembly Budget Committee Vice Chairman Jeff Gorell, R-Camarillo, said it was "appropriate for the governor to have conservative revenue projections."
Assembly Republican leader Connie Conway of Tulare called Brown "the adult in the room." She predicted that the most meaningful fault line in the coming budget debate would run through the Democratic caucus.
Senate President Pro Tem Darrell Steinberg, a Sacramento Democrat, said in a statement that Brown's revenue projections would be subject to a "deeper analysis," suggesting a potential dispute about how much money is available to spend.
Democratic lawmakers will face pressure from social service advocates who said Brown's budget fails to reflect the promise of a recovering economy.
In his revised budget, Brown expanded on his January appeal to overhaul the education finance system, seeking to give school districts greater flexibility over how they spend state money and directing more money to school districts with relatively high proportions of students who are poor or learning English.
Brown proposed Tuesday to increase first-year spending on his education overhaul by $240 million over his January proposal, to $1.9 billion.
He proposed to earmark $1 billion in state education funding to implement English, math and other subject guidelines, the Common Core standards. Brown called one-time funding for teacher training, instruction materials and technology to implement the standards a "great intellectual move."
Meanwhile, he largely dismissed calls to increase spending beyond education. "Everybody wants to see more spending," Brown said. "That's what this place is: It's a big spending machine. You need something? Come here and see if you can get it. Well, but I'm the backstop at the end, and I'm going to keep this budget balanced as long as I'm around here if I can."
In the budget revision, Brown maintains his proposal to increase funding for the University of California and California State University systems by as much as 20 percent over four years, and he proposes a statewide approach not a county-by-county effort to implement California's expansion of Medi-Cal under the federal health care overhaul.
Modesto Bee education reporter Nan Austin contributed to this report.
Area legislators react to Gov. Jerry Brown's budget revisions:
"I am pleased Governor Brown's budget has increased the base level of funding per pupil. Most importantly, it implements local control, which allows school districts to determine the best use of funds for their unique districts."
Assemblywoman Kristin Olsen, R-Modesto
"I want to applaud the governor for the restraint he has shown. The voters showed trust in state government in November by approving a tax increase, and we owe it to them to use the money as it was intended."
state Sen. Anthony Cannella, R-Ceres
"I find it refreshing that the governor is taking a long-term view of our budget and reducing debt. Not assuming that the multibillion-dollar increases the state has received will continue indefinitely is a budgeting approach long overdue in Sacramento."
Assemblyman Adam Gray, D-Merced
"With tax revenue down and California's economy seeing a slow recovery the governor made appropriate conservative revenue assumptions today."
Assemblyman Frank Bigelow, R-O'Neals