On January 10, Governor Jerry Brown released a proposed 2017-18 budget that reflects both deep uncertainty about looming federal actions and a tempered economic and fiscal outlook for the state. The Governor forecasts revenues that are $5.8 billion lower — over a three-year period — than previously projected and proposes taking steps to address a $1.6 billion projected shortfall for 2017-18. The Governor’s proposal assumes current federal policies and funding levels, even as the Affordable Care Act and other federal programs face the prospect of cuts with President-elect Trump taking office.
As part of addressing the deficit that his Administration foresees, the Governor proposes to rescind several one-year spending commitments that had been part of the 2016-17 budget agreement, including $400 million for affordable housing programs and $300 million for renovation of state office buildings. The Governor also proposes to “pause” a multiyear plan for reinvesting the state’s child care system.