Gov. Jerry Brown urged members of the Assembly’s budget panel Monday to support his plan for a new rainy-day reserve before voters in November, with a floor vote on the proposal possible as early as mid-May.
Making a rare appearance before a legislative committee, Brown received a friendly reception from Democrats and Republicans alike during an informational hearing on reserve legislation put forward by Assembly Speaker John A. Pérez, D-Los Angeles.
Brown said his plan offers “protective restraint.”
“When the rain comes, we store it,” Brown told the Assembly Budget Committee. “If it works, it will pinch to a certain degree, and that is what the goal is.”
The proposal would divert capital gains revenue into a rainy-day reserve when it exceeds 6.5 percent of total revenue. It would allow the money to be spent to pay down debt as well as setting aside money to fulfill the state’s constitutional school-funding guarantee. Brown called a special legislative session on the subject earlier this month.
In addition, it would replace a reserve measure already on the November ballot, ACA 4, the product of a 2010 budget deal. The switch will require Republican votes, with GOP lawmakers on the committee Monday seeming open to the outlines of the Brown-Pérez plan.
Details will be worked out in the coming weeks, Brown and Pérez said. Pérez said he would like to bring a reserve measure to the Assembly floor in two weeks, before the budget process gets underway. Earlier Monday, though, Senate President Pro Tem Darrell Steinberg, D-Sacramento, said the Legislature should consider the reserve proposal with the budget.
Later, as budget committee members addressed Brown, there was little mention of concerns by the Legislature’s nonpartisan fiscal analyst that a reserve based on capital gains estimates for a given budget year would “rely on subjective judgments that could increase or decrease the initial reserve.”
Afterward, Pérez downplayed those concerns. “That’s what budgeting always is,” he said. “There are no perfect measures, there are no automatics so you have to make the best evaluations that you can.”