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Federal cuts lower California budget outlook

  • Gov. Jerry Brown responds to a question concerning his plan to give more local control over education funding as he discussed his revised 2013-14 state budget plan at the Capitol in Sacramento, Calif., Tuesday, May 14, 2013. Despite surging state tax revenue, Brown unveiled a revised spending plan for the coming fiscal year that is $1.2 billion lower than he projected in January. (AP Photo/Rich Pedroncelli)

SACRAMENTO — Despite surging state tax revenue, Gov. Jerry Brown on Tuesday announced a spending plan for the coming fiscal year that is $1.2 billion lower than he projected in January.

Actions by the federal government are at least partly responsible.

The forecast for growth of personal income is lower because the federal government did not extend a 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.

Brown said the proposed budget he released in January did not anticipate the lower growth forecast or the depth of the federal government cutbacks, which he said are affecting the state's overall economy just as it was gaining strength after years of recession.


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