California budget: Slight slump leads Gov. Jerry Brown to shrink spending plan

The San Jose Mercury News reports:

Warning that the "surging tide of revenue" California has enjoyed is beginning to ebb, Gov. Jerry Brown on Friday unveiled a revised $122.2 billion budget that shrunk slightly compared to January because of the slowdown on Wall Street.

Unless voters this fall endorse an extension of 2012's Proposition 30 -- which temporarily raised taxes on the wealthy and helped the state dig itself out of a fiscal hole -- the budget will dip back into the red in the near future, Brown said at a Capitol news conference.

Surrounded by charts that spelled out the state's uncertain fiscal future, Brown wouldn't say whether he supports or opposes union-led efforts to extend the millionaires tax for another 12 years with a November measure that is almost certain to make the ballot.

But the governor acknowledged for the first time that getting by without the extra cash will be a "formidable" challenge for his successor.

"If it doesn't pass, then we'll manage," said Brown, who championed the temporary measure four years ago. "But we will have cuts. There's no question about that."

Democrats, teachers and union leaders who want to see Proposition 30's taxes on top earners extended seized on Brown's remarks as proof of the havoc that letting them expire in 2018 will wreak on the state budget and public schools -- the primary beneficiary of the revenue.

Jerry Brown feels the whiff of less revenue coming in.