California, for years the poster child of government financial troubles, is now planning a budget that not only eliminates the state's budget deficit but also projects a multi-million dollar surplus. Gov. Jerry Brown's budget for the fiscal year beginning in July puts the state on the path to a $1 billion rainy day fund, according to Reuters.
Brown's budget projects $98.5 billion in revenues and transfers for fiscal year 2013-14, with spending at $97.7 billion. Under that plan, the state would have a surplus of $851 million for the next fiscal year, added to a $785 million surplus projected for the current year.
Brown predicted a balanced budget for the next four years. Just a year ago, California faced a $9 billion budget deficit. Two years ago, the deficit was $25 billion.
The state enacted deep cuts in social services and other state functions. The state's economy is recovering, though slowly, withfalling and job growth that tops the national average. In November, voters approved a tax increase that closed much of the remaining budget gap.
Brown's budget increases spending on education and health care from current levels, but does not totally roll back previous cuts in social service programs. Brown said he will resist calls from some state legislators to raise spending quickly. "Its very hard to say no. That's going to be my job," he told Reuters.