Overview of Governor Brown's Proposed Health Budget for 2014-2015

January 10, 2014

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The state budget expects to spend $155 billion in State Funds next year. Roughly $106 billion is from the state General Fund, $44 billion from Special Fund Programs and $4 billion from bond expenditures.

The state’s revenue comes from personal income taxes, sales taxes, corporation taxes, car taxes, alcohol taxes and tobacco taxes. The big growth in revenue is from the capital gains component of the personal income tax due to the growth in stock market values, while many other taxes such as gas taxes, alcohol, tobacco, corporate and insurance taxes are flat or declining.

Income tax revenues are up 8.5%. Sales taxes increased by 5.7%. $9.5 billion of the $37 billion in sales tax revenues are dedicated to county realignment funding for mental health, social services, health, public safety and transportation. State taxes amount to 6.98% of personal income – a figure significantly lower than the late 70’s, mid 90’s and the middle of the last decade.

The Governor is proposing to completely pay off the state’s “wall of debt” by 2017-18, which peaked at $34.7 billion in 2010-11. He is also proposing to pay off the state’s economic recovery bonds and deposit $1.6 billion in the state’s Rainy Day Fund. Most of the unanticipated growth in state capital gains revenues is dedicated to paying down the debt and funding the Rainy Day Fund.

The state General Fund devotes $45.2 billion to K-12 education (9.5% growth), $28.8 billion to Health and Human Services (1.6% growth), $12.3 billion to higher education (10.8% growth), and $9.6 billion to corrections (2.1% growth).