The added K-12 funding is made possible by a cash windfall of almost $4.6 billion that the state has enjoyed in the first 10 months of this fiscal year, mostly due to better-than-expected personal income tax revenue. Proposition 98, an education funding measure passed by voters in 1988, requires that a significant chunk of that money go to schools.
But the May revision also includes a downward shift in the short-term economic outlook, as the federal government did not extend the payroll-tax deduction that was in place for 2011 and 2012. That means forecasted personal income growth in 2013 has been almost halved, from 4.3 percent to 2.2 percent. That plus the federal budget sequester require renewed fiscal caution in California, the budget proposal says.
"For the first time in more than a decade we've got a balanced budget and it's solid," Brown said at Tuesday morning's news conference, adding "we have money to invest in education because of Proposition 30," the sales tax and income-tax hike for the wealthy that voters approved in November.