SACRAMENTO, Calif. (AP) — Gov. Jerry Brown is announcing a spending plan for the coming fiscal year that is $1.2 billion lower than he projected in January despite surging state tax revenue. The somewhat surprising reduction Tuesday in the state's general plan spending is due in part to actions by the federal government. The forecast for growth of personal income is lower because the federal government did not extend the 2 percent payroll tax reduction. That reduced the projections for personal income growth for the coming year in half, to 2.2 percent.
The governor's budget document says the federal government spending cuts — the so-called sequester — also helped erode the budget projections for the fiscal year that starts July 1. Even with the reduction, the Democratic governor is making education a top priority in the $96.4 billion general fund he proposed Tuesday.