The Importance of Being Prudent

It’s January, which means the legislature has reconvened for a new year of Session, new laws have come into effect, and a brand new budget proposal has arrived on all of our desks from the governor’s office.

The arrival of the initial draft of the year’s budget sets the stage for the ambitions of the legislature; it shapes, defines and sets limits to what we will be able to achieve and which areas we will have the most success focusing on. Most importantly, it is the release of the governor’s proposed budget that sets the tone for the legislative year.

In this year’s proposal, Gov. Brown has made the focus of his final year in office very clear – California needs to be fiscally prepared, not just for the immediate future, but the years down the road. Simply put, California needs fiscal sustainability.

The governor has projected a $6.1 billion surplus, the lion’s share of which is proposed to go towards our state’s reserve. The budget plans on keeping $2.3 billion as regular reserve and placing $3.5 billion into the rainy day fund.

The rainy day fund, technically known as the Budget Stabilization Account, was overhauled by the bipartisan, voter-approved, Proposition 2 (2014). Prop 2 requires the state to annually deposit cash until the account holds 10% of the general fund.

This year’s budget would fulfill that requirement. I am pleased that the governor is acknowledging the hard reality that when there are ups, as we are in now, there are always downs.

I served on Glendale City Council through the recession. During that time, we had to make very tough decisions, painful cuts that were hard on everyone. But it was Glendale’s willingness to weather that kind of austerity that allowed the city to not only recover, but to flourish swiftly from the hardships of those years. Responsible budgeting is what allowed Glendale to fare better through the recession than most other cities and to continue to provide the services and programs necessary for a high quality of life.

The substantial amount of money this budget proposes for storing away would bring our total reserves to $15.8 billion, which would greatly mitigate the pain of future economic downfalls and challenges. It understands the common sense principle that economic downs are not a matter of if but when.

Fiscal sustainability can be tough, but is key in good governance – just because we have money doesn’t mean we need to spend it.

That being said, now the negotiations start. While the real “hard” negotiations won’t heat up until mid-spring, legislators will begin to look for room in the budget to fund a new round of proposals. While the majority of new bills will aim to improve the quality of life for Californians, I trust that the stage set by this budget will keep us restrained enough to protect the programs that we already have in place, and direct us in prioritizing our new ideas. Keep in mind, even with fully-funded reserves, we still have work ahead of us to ensure a structurally-sound budget and long-range fiscal plan.

Much is expected to change in this budget by the time the legislature votes on it in June. I will also be looking to you to share your thoughts on the 2018-19 budget. Do you agree with the governor’s direction? Do you think it should go further? Are there areas where you see an absolute need for funding?

The primary duty, and my first priority, is to represent you. To listen, understand and take your collective ideas with me to Sacramento. If you would like to weigh in on this or any other matter please know you are always welcome to reach out to my district office or email me at any time.

I look forward to another year of serving you in Sacramento.

District Office: (818) 558 – 3043

Email: Assemblymember.Friedman@assembly.ca.gov

  laura friedman