Gov. Brown’s budget: Where your money could be going, other things you need to know

Thursday morning marks a critical point in the annual debate over government spending in California. We are updating this page throughout the day as details of the governor's plan are unveiled. You can read a summary here and follow our reporters on Twitter for the latest: @chrismegerian, @mcgreevy99, @melmason, @paigeastjohn and @philwillon.

Here's what you need to know so far:

How is Brown addressing the issue of prisons?Read more

Brown proposes to cut California's reliance on out-of-state private prisons by half, but seeks to postpone longterm discussion about the state's own aging lockups and need to rent space from others until next year.

He calls for shrinking the number of inmates housed outside California in the next year by 4,000 -- reducing related state spending by $73 million. As of this week, the state had a little more than 8,000 inmates in private prisons in Arizona, Mississippi and Oklahoma, and another 6,250 prisoners in contracted lockups within the state.

The governor's prison spending cuts are attributed to sooner-than-expected reductions in the overall state prison population because of passage of Proposition 47, which reduced penalties for drug- and theft-related crimes, and court-ordered releases.

The total prison population currently is 129,700, more than 5,000 inmates fewer than the year before. Brown's administration now projects the inmate population will dip below 128,000 inmates in the next year.

A new tax credit for the poor?

The governor's plans include a new earned income tax credit for poor Californians, which has been a priority for Democrats in the Assembly. As the economy continues to improve, Brown has been under pressure to do more about persistent poverty in the state.

“We’re very excited about it. It’s going to do a lot to help the poorest of the poor, to hopefully lift these folks out of poverty,’’ said Assemblywoman Shirley Weber (D-San Diego), chair of the Assembly Budget Committee.

What's going on between UC chief Janet Napolitano and Gov. Brown?Read more

A two-year freeze on tuition for state residents is the highlight of an agreement between Brown and Napolitano after months of negotiations and lobbying to avoid what UC said might have been hikes as high as 5% in each of the next five years. In-state students now pay about $12,200 a year for basic systemwide tuition and fees, not including room and board and some campus charges; that figure is triple what it was in 2002.

However, out-of-state students – whose rising numbers have irked legislators and California families – are expected to face 5% tuition increases to about $36,900 next year, and further hikes in later years, officials said.

What is California’s budget process?Read more

It begins every January when the governor releases his initial spending plan. The proposal is revised and reissued in May, after the state's revenue picture has become clearer and the governor and lawmakers have discussed their goals. A final budget, due June 15, is then negotiated.

What's happening now?

Gov. Jerry Brown issues his updated budget proposal Thursday morning in the Capitol. In revising his blueprint, he will have taken into account billions of dollars in unexpected revenue that has flowed into state coffers over the last few months.

Where will the extra money go?

California law dictates that most, if not all, of the windfall will go to schools and community colleges. This is a boon for public education, which suffered sharp cuts during the recession, but could leave less money for other areas of the budget.

What happens next?

There are many potential tension points between the governor and the Legislature as they hammer out a final budget.

Many lawmakers, advocates for the poor and others want Brown to make new funding available for more childcare services, healthcare for the needy and other government programs. The governor, who has faced criticism over persistent poverty in California, is proposing a new a tax credit to keep some money in the pockets of the state's poorest residents. It is unclear whether the Legislature's ruling Democrats will press for more aid.

Some lawmakers want money for road repairs and similar infrastructure needs. And the governor and the University of California's leaders have been at odds over whether the state should provide more money to prevent tuition increases.

How does the budget affect the drought?Read more

The governor and lawmakers have passed two emergency spending plans since early last year to support drought relief and water projects. In addition, the state has enacted more stringent regulations on water use in cities and towns. The budget could include additional money to enforce the rules or could provide new details on the state's response to the continuing crisis.

How does the drought affect the budget?Read more

This year, tax collections are unlikely to suffer from the drought, and so far they’ve outpaced expectations. Revenue was roughly $1.3 billion ahead of projections at the end of April, according to the analysts.

What is the on the Assembly Democrats' wish list?Read more

As California tax coffers burst with higher-than-expected revenue, Assembly Democrats have detailed some of the ways they want to use the money.

Topping their wish list are the tax credit for poor Californians, more support for public universities and new funding for overdue road repairs.

Could California's latest budget problem be too much money?Read more

In a worst-case scenario outlined by legislative analysts, a budget gap could result if higher-than-expected revenue collides with California's formula for funding public schools and community colleges.

As state revenue increases, the formula requires more money to be spent on education to compensate for years of budget cuts, and this could cut into other areas of the budget.

What about the healthcare program for California's poor?Read more

California lawmakers announced new legislation that would pump more money into Medi-Cal, which has expanded to cover more residents even as the state has suffered from recession-era funding cuts.

The bills (SB 243 and AB 366) would reverse cuts in payments to doctors who treat Medi-Cal patients. It also would go further, requiring higher payments from managed care plans that contract with the state and boosting funding for hospitals.

Lawmakers said the money is necessary to ensure that there are enough healthcare providers in California willing to treat poor patients through the Medi-Cal program.

What could fees on air polluters mean for the budget?Read more

California could generate much more revenue from fees on polluters than Gov. Jerry Brown expects, legislative analysts say in a report.

Administration officials have estimated $1.7 billion in revenue from the fees by June 30, 2016, the end of the state's next fiscal year. But legislative analysts say the state could rake in between $3.3 billion and $7.7 billion in that period.

Will Obama's immigration action affect California's budget?Read more

President Obama's executive action on immigration may have a major impact on California's budget, according to reports issued by legislative analysts.

The action could shield from deportation millions of immigrants who are in the country illegally, including hundreds of thousands in California. That would result in many becoming eligible for government services like public healthcare.

Others could receive help through state programs that provide caregivers or cash assistance for the elderly and disabled.