Budget Update: November 8, 2012

On Tuesday, Californians voted to pass Proposition 30, the initiative supported by Governor Brown to raise the income tax rate for higher-income Californians and raise the sales tax by ¼ percent. Since the voters agreed to these tax increases, the new revenues are expected to allow the state to avoid the “trigger cuts” — $50 million to regional centers, and much more to education — that would otherwise have taken effect in January 2013.

This is very good news for those served by regional centers, since the budget for fiscal 2012-13 already contains a $200 million reduction (continued from the previous year’s budget) and a 1.25% cut in payments to service providers (replacing the 4.25% cut in payments that service providers struggled with during fiscal year 2011-12).

As of October, the latest report from the California State Controller showed that revenues for the current budget year were 2.2% below projections. In January 2013, around the same time the Governor shares his budget proposal for the coming fiscal year (FY 2013-14), there will also be an update on the state’s fiscal situation. It is hoped that the recently-passed tax increases and improvements to California’s economy will enable budgets for state-funded services to remain stable.