Transcript: Press briefing Q&A with CA Gov. Jerry Brown on the proposed 2014-15 state budget – Jan. 9, 2014

Partial transcript of the press briefing Q&A with Gov. Jerry Brown (D-California) on the proposed fiscal year 2014-15 state budget. The press conference was held on Jan. 9, 2014:

Question:
Governor, what gives you the confidence that you’ll get the two-year extension of the prison [population reduction] deadline?

Gov. Jerry Brown (D-California):
Well, because we’ve been negotiating with the various parties – the adversaries and the judges – and I think we’re getting very close. We hope we are. And if we aren’t, we have the capacity to buy out-of-state beds as well as in-state.

Question:
What do you expect the compromise to be?

Gov. Jerry Brown (D-California):
Well, we’re in discussions and generally in these kinds of negotiations, they’d rather have us get through the final proposal and then we can announce that.

Question:
[Inaudible]

Gov. Jerry Brown (D-California):
Will I address that? The budget speaks for itself, and I have no comment on other programs beyond that other than to say I certainly will listen to legislative leaders and members as they make their proposals.

But again, wisdom and prudence is the order of the day. And when you see this kind of liability, one has to hesitate before anything too major.

All right. The second thing is the drought. We already have the drought task force. I’ve facilitated the exchange of water. Governors can’t make it rain but we’ll do everything that is humanly possible to allow for a flexible use of California’s water resources.

Question:
…Since you talked about prudence is never easy and it’s hard and you’re preaching prudence today, can you explain a little bit of the thinking on the high-speed rail and the use of the cap and trade money? Let me just say you have critics as of this morning on both sides of this debate – supporters of the train and clearly opponents of the train.

Gov. Jerry Brown (D-California):
No big project – whether it was the Golden Gate Bridge, the Transcontinental Railroad, or the Panama Canal – was free of very strong criticisms, skepticism and attack. So that goes with the territory.

This is a big project, was started by my predecessor – something that I had proposed and talked about when I was governor the last time. There’s no doubt that California will have millions more people come to live in the state. Many of them will live in Central California.

To just add more freeway miles, particularly when already vehicle miles traveled last year was 331.8 billion vehicle miles traveled. We need alternatives, and transit and high-speed rail are part of that mix.

And the program that I have set forth strengthens the local rail – the commuter rail between San Francisco and San Jose and the Southern California in the Los Angeles area.

It reduces greenhouse gases. It ties our California together. We are divided in many respects – north and south, coast and the center of the state. We have to pull together to form a greater community, and the high-speed rail serves all of those functions, and that’s why I think it’s in the public interest.

And using the money from cap and trade, which is the result of deterring greenhouse gases is very appropriate, while it’s also appropriate to spend a lot of that cap and trade money in the way that I’ve proposed in lower income communities, in dealing with a lot of pollution and greenhouse gases. But there’s no doubt that the high-speed rail is a reducer of greenhouse gases, an enhancement of the quality of California life, and a bringing together of the various regions of our state.

Question:
And [what about] some of those who say you’re trying to prop up a system you can’t spend money on the train now with the court ruling and everything else?

Gov. Jerry Brown (D-California):
Well, the alternative would be not to spend the money and we do need that money and we’re going to spend it. I mean, you know, we are in an age of minds that – when no one’s talking about the Marshall Plan or putting a man on the moon or the transcontinental highway. But I think California is still that generator of dreams and great initiatives, particularly in the private sector but still also in the public sector, and I think high-speed rail is worthy of this state, which said on the building “Bring me men to match my mountains.” In other words, give us the dreams to match our capabilities. And I think the high-speed rail fits into that and I think that cap and trade is a very good source for that, and it’s not the general fund – it’s coming right from sources of pollution and going to right to reduce pollution.

Question:
Governor, the state teacher retirement system has huge unfunded liabilities. Why is there no money in this budget to address that?

Gov. Jerry Brown (D-California):
Quite frankly, how we do that – how much from what funds, what do the teachers do, what do the school districts do, how does the state handle this – is going to be quite contentious, and I’ve set forth a period of time to meet with all the stakeholders and work it through. It’s going to be daunting. It has to be done. And sometimes it’s hard to get things done until people really see the disaster ahead.

So I’m fully aware of it. If the legislature can do it this year, fine. I think it’s going to take a little longer. But I’m fully committed to it. I certainly want to reserve fiscal capacity in our budget so we are able to pay it when we can form the agreement.

Question:
…People are saying that if they can’t keep more of the reserves, they’re going to have to make serious cuts…The budget allocates more money to the general fund but it maintains the reserves at 1%. There were some fixes made last year but do you think that they’re not being honest when they say that they are going to have to make these cuts?

Gov. Jerry Brown (D-California):
Well, everyone says that they need more money, and I would say that everyone desires more because more is better than less. But nevertheless, we’ve given the courts more. We want them to be able to manage more effectively, quite frankly. And I think I will leave for Mr. [Michael] Cohen a more detailed response on that.

Question:
…Can you talk about the rainy day fund? I think labor would again be more supportive of this plan than what’s currently scheduled for the ballot. How are they different?

Gov. Jerry Brown (D-California):
Well, the measure we have will be on the ballot unless it’s changed, and so I think that provides a lot of incentives to come up with some better alternatives. And my goal is to get a rainy day fund that is more flexible, that is workable, and that’s the goal. And we are certainly looking to legislative leadership and their ideas but we do need a rainy day fund to help us.

And the reason for that rainy day fund is the volatility. So with that zig zag up and down of capital gains spending, the only way to offset that is to have money in reserve and that’s what I intend to do, unless people want to not tax capital gains and I think that would be a much heavier lift.

Question:
Governor, what about the water bond? Do you expect to have the water bond on the ballot this year?

Gov. Jerry Brown (D-California):
No. I’d leave that to Michael. You’re talking about the cap. Those things are rather technical, and the difficulty in drawing one is you don’t know what the world is going to look like in a few years and they’re all premised on flows of money and the money comes in at different times. Sometimes – for example in the cap that exists today, it doesn’t allow spending down debt. It counts that as just spending. Well, paying off debt is not a form of spending; it’s putting you in a much better fiscal condition.

So I’d direct Michael – we don’t have the final form. We’re going to work with the legislature on that but you have the general outlines.

Question:
Governor, you talked a lot about, put a lot of emphasis on lowering the wall of debt. But I didn’t see in there except in the future years any reimbursements to counties for reimbursable mandates. Could you address that issue of why that’s put off given that your partners and lot of the programs and services…?

Gov. Jerry Brown (D-California):
Why we didn’t do what to the counties?

Question:
Provide the money for the money that’s owed in the wall of debt for counties’ reimbursable mandates?

Gov. Jerry Brown (D-California):
…I’m going to let Michael handle that. Michael, what do we owe the counties?

Michael Cohen, Director of the California Department of Finance:
So we would completely pay off the existing $25 billion wall of debt by 2017-18 and that includes the amounts owed on reimbursable mandates to counties.

Question:
But you don’t set aside any money for 14-15 for counties, to the best the way I read it. That’s later and I want to know why you’re not taking steps.

Michael Cohen, Director of the California Department of Finance:
That’s consistent with budget agreements from the last couple of years that 14-15 was already set in law in terms of the suspensions of mandates.

Question:
Governor, do you have water bond on the ballot this year?

Gov. Jerry Brown (D-California):
Well, that’s – well, you know, the world is changing with these serious drought conditions but I think I’ll withhold judgment on that at this point.

Question:
Governor, there’s been a lot of talk about growing poverty in California, the unevenness of the economic recovery. Can you talk about what your budget does to address some of those problems? The advocates are saying that it doesn’t do enough.

Gov. Jerry Brown (D-California):
First of all, we’d signed the largest minimum wage in the country. We’re expanding billions of dollars for our schools to be directed to low-income families – kids that come from families of low-income and do not speak English at home or foster care kids. That is really giving the fish hook they can fish with. I mean, we’re trying to create the opportunity for people to climb out of lower income status. In addition to that, we’re expanding Medi-Cal. We’re enriching the services. We’re expanding it to more people. And certainly, health care insurance is something very valuable and will enable low-income people to take care of their other needs.

In general, the macro redistribution that is occurring is global. It’s happening in China. It’s happening in Europe. And it’s happening throughout the United States, and California is not immune to that.

We have a pretty strong safety net, I think, it’s compared with other major states and it’s better than most of the states.

So again, there’s always a gap between what we’d like and what we’re able to do.

This is a prudent budget. If people want more for income support, they’ll have to take it from something else, and I think we ought to live within our means. We’re a relatively high tax state. I don’t think that’s an avenue. We’ve committed a lot of funds, and I think education and good health are certainly the way out of poverty. And if other ideas are proposed, I’ll be glad to consider it.

Question:
[Inaudible]

Gov. Jerry Brown (D-California):
Well, the big issue in poverty is not having enough money. So one thing is to provide money and we do that through CalWorks. And we provide training, and we provide child care, and we provide in-home support services to the tune of several billion dollars. So there’s a lot of things we’re doing.

But in a society with the structure of inequality that we have, there’ll never be a point then that you won’t be able to say “Can you do more?” We can always do more but I really think California relative to the rest of the country is doing a very credible job in responding to the needs of our people.

Question:
On the issue of prisons really quickly and looking at your budget, it looks to me when you talk about older inmates, sick inmates, and possibly some changing of the credits for people and how they accrue, it seems as though you’re extending an olive branch to the judges in a way that maybe I haven’t seen you say over the last year.

Gov. Jerry Brown (D-California):
Well, we’re working as collaboratively as we can, and I want to get the job done. So I’d put it there.

Question:
Is that a change in your thinking though about letting those people possibly…?

Gov. Jerry Brown (D-California):
No, I’m – my job is to protect the public safety of California. I work very closely with the representatives of law enforcement and I’m doing everything I can to maintain of the laws that we have. But where the courts are absolutely insistent, then, you know, I respond. And that’s what we’re doing. That represents that.

Question:
…With the prisons, you have criticized your predecessors for using what you call tricks in the budget. But you’re assuming a two-year extension from these judges who have been not real friendly to the state’s interest. I’m just wondering why you did that and what you plan to do if they don’t allow a two-year extension?

Gov. Jerry Brown (D-California):
I would then buy out-of-state beds and we think we can get it done. So there’s no adjustment. So there’s no trick. It’s very clear. We think we’re going to get the extension; if we don’t, then we’ll do the best we can to make sure that we have the capacity to continue to incarcerate people that are there by operational law.

Question:
…the special fund to implement the fracking regulations that I think you’ve signed. Do you know how much of an increase you’re setting in the per barrel regulatory fee and how many positions you’re going to be able to create so you can assure the people of California that you’re going to carry out this…?

Gov. Jerry Brown (D-California):
I’m going to leave that to Mr. Cohen. I will say we are increasing our inspectors for the rail. As you know, California only supplies a third of its oil, and to the extent we don’t drive oil from California, we have to import it. Most of it come in ships, but increasingly it’s going to come in trains, and that requires inspectors and the budget has an increase in inspectors because we want to do everything we can to guard against accidents as we’ve seen in the other parts of the country – three times.

Question:
[Inaudible]

Gov. Jerry Brown (D-California):
What? Yeah, I don’t think this is the year for new taxes. I went up and down the state campaigning for Proposition 30. I said it was temporary; it is going to be temporary. And I just think we ought to do everything we can to learn to live within our means before going back again and trying to get more taxes.

Question:
Governor, you talked about the history of the budget and how people made poor decisions in the past that led to some of these deficits…Why do you think that this time it’s going to be different?

Gov. Jerry Brown (D-California):
Well, I think the last three years have been different and the budgets have been leading us down a path of fiscal stability and when I ran for governor, I said, no smoke and mirrors and I’m going to tell you the truth, and the truth is we’ve been paying down debts, we’ve been cutting programs, we got the people to approve of taxes, and we’ll continue to do that. I see no reason.

Question:
Governor, given these large surpluses, in retrospect, was Prop. 30…?

Gov. Jerry Brown (D-California):
Just look at that. Look how little that is! [Laughter] Compares to that. That says it all!

Question:
The rest of my question, governor, was given the projections that there are some surpluses – I won’t say they’re huge. [Laughter] In retrospect, do we need Prop. 30?

Gov. Jerry Brown (D-California):
[Held up visual aid of California’s Long-Term Liabilities] We sure did.

Question:
In retrospect, do you think we need it? There are some who say we didn’t need it. The economy came back.

Gov. Jerry Brown (D-California):
Well, we’re sure going to use it. I think we needed it. Hey, if we knew everything at any moment about the future, it’d be a different kind of world. But certainly, there was a lot of reductions in our schools so I think it was appropriate and I do think it’s fair given the questions about inequality. We are asking those who are very privileged, who benefitted from a 30% increase from the stock market in 2012. There’s no wage earners – not many of them – that get 30% pay raises. So I do think there’s an equity component to Proposition 30 and then there’s a stabilizing component and when you look at the long-term liabilities, we have plenty of obligations to take care of.

Question:
Governor, two other states – Colorado and Washington – have legalized marijuana. Do you favor efforts to legalize marijuana in California?

Gov. Jerry Brown (D-California):
I think we ought to kind of watch and see how things go in Colorado.

Question:
[Overlapping audio]

Gov. Jerry Brown (D-California):
Well, the significance is that there are a number of elderly or disabled people that need assistance, and California more than any other state provides a very generous amount of funding to help poor families under our Medi-Cal program take care of disabled and elderly people, often in most cases, who are their relatives. So it does support low-income families at a very point of real difficulty and often crisis, and so I think that would count as our effort to deal with inequality.

Question:
And potentially in the long run, saves the state money?

Gov. Jerry Brown (D-California):
Well, that’s the whole point of our coordinated care initiative to link the in-home supportive services with other decisions – other medical decisions – and try to reduce nursing home commitments, keep people in their homes, and otherwise return people to health.

Question:
Can you talk about how this budget helps college students who’ve had to endure huge tuition increases over recent years?

Gov. Jerry Brown (D-California):
It helps them in two ways: by holding tuition flat and by encouraging the universities, the colleges to enable students to get through within four years instead of the much longer period that seems to increasingly be the order of the day.

Question:
Can you talk about the carrot and stick approach you’re taking to fund the UC-CSU [University of California and California State University]? You’re trying to use some of the money that you’re giving them to encourage them to change what they do.

Gov. Jerry Brown (D-California):
I do think that it used to be four years and free. Now, in many cases, it’s six years and expensive. $4,000 to $6,000 to $7,000 for Cal State; $12,000 for UC and all the living expenses. So I do think we don’t want to keep kids in college any longer than we have to and we have to find ways of reducing the cost structure by either making the curriculum more flexible, finding ways of using our teaching resources more productively, or employing online technologies in various ways or other ways. I just think we’re in a new world when the prices of getting a room and the prices of tuition and the prices of books are so much higher that that argues very strongly for making sure that students can get their degrees and get about their lives much sooner than is the case for hundreds of thousands today.

Question:
Governor, the farmers want you to declare a drought emergency now. Why won’t you?

Gov. Jerry Brown (D-California):
We have a water task force that we’ve set up. We’re meeting today on that. And I’m very aware of the problems of the drought. We had another one in 1977 that I had to deal with. And we’ll take whatever steps we can in collaboration with the state’s farmers to deal with water and also the urban people have to do their part. So we’re taking it very carefully but don’t think that a paper from the governor’s office is going to affect the rain. We are doing what we can do in terms of water exchanges and we’ll do other things as we get down the road.

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2 Comments on “Transcript: Press briefing Q&A with CA Gov. Jerry Brown on the proposed 2014-15 state budget – Jan. 9, 2014

  1. Pingback: Gov. Jerry Brown ties UC & CSU funding increases to reforms | What The Folly?!

  2. Pingback: Gov. Jerry Brown proposes increasing prison spending by 2.1% | What The Folly?!

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