California has a budget – but is anybody happy?
June 27, 2012
• Democratic majorities approve budget bills
• Republicans predict doom and further gloom
• UPDATED @ 10:3 p.m.
The California Legislature has sent to Gov. Jerry Brown a $92 billion spending plan for the fiscal year that starts Sunday. The governor signed the budget late Wednesday night, saying, "This budget reflects tough choices that will help get California back on track.”
Hardly anybody’s happy, it seems.
The budget was passed by a simple majority vote in the Assembly and Senate, since it does not include any tax increases. Thus Democrats, who hold majorities in both houses, but not the two-thirds majority needed for a tax increase, were able to approve the plan without the need of any Republican votes.
The Republicans are in a huff.
“This irresponsible budget grows state spending by more than $10 billion and relies upon the assumption that voters will approve a massive $47 billion tax hike,” says Senate Republican Leader Bob Huff, R-Diamond Bar. “Democrats ignore the simple truth that voters have rejected the past eight tax increase proposals placed before them. While this budget should be a reflection of the state’s priorities, it threatens $6 billion of education cuts and lacks any of the meaningful reforms the people of California rightfully want. There’s no pension reform, no job-creating regulatory reform and nothing that increases government efficiency.”
The spending plan depends on voter approval in November of a tax hike on the wealthy and an increase in the state sales tax. The governor’s tax plan is one of at least a dozen initiatives voters will have to wade through on Nov. 6.
Other parts of the spending plan include:
• If state union leaders don’t agree to a 5 percent pay cut for their members, the governor can send state workers packing on unpaid furloughs.
• Medi-Cal payments to hospitals are trimmed
• The state’s Healthy Families wellness program for children is killed, with the kids put into Medi-Cal instead.
• Child care for low-income workers is slashed by 8.7 percent, affecting more than 10,000 families.
• CalGrants to college students will be cut for students at for-profit private schools ranging from the University of Phoenix to the local barber college. Other CalGrants are also trimmed.
• Unemployed workers on the welfare-to-work program will have two years to get trained and find a job instead of four.
• In-home health care is cut by 3.6 percent.
• If voters reject Mr. Brown’s tax increases, the University of California and California State University systems will see state funding slashed by abut $500 million while those attending the state’s kindergarten-12th grade public schools will see their school year cut down to 160 days, perhaps the shortest in the nation, and nearly a month less than most states and many nations.
“If the Governor had the courage, he would send this budget back and demand the Legislature send him a fully vetted plan that is truly balanced, contains real reform and spurs job creation in our state,” says George Runner, the Second District member of the state Board of Equalization.
“The truth is that California won’t have a real budget until November. That’s when voters will decide whether to embrace or reject the billions in higher taxes assumed in this budget.”
California Community Colleges Chancellor Jack Scott says the new budget will pose significant challenges and risks for California community colleges.
“Colleges will have to make deeper cuts to programs for students this fall because the outcome of the governor’s ballot initiative won’t be known until November. Unfortunately, we face another 7.5 percent cut if voters don’t approve the ballot measure,” says Mr. Scott. This hit would further impair our ability to educate the workforce that California’s economy needs and push some colleges to the brink financially.”
Also a bit grumpy are the state’s cities.
They point to Assembly Bill 1484 which, if signed by the governor, will give the California Department of Finance new ability to withhold money from cities.
California cities are considering legal action over a new budget provision that allows the state to garnish local tax revenue if it believes governments are keeping too much money formerly dedicated to redevelopment.
Their lobbying group is vowing to go to court over the measure.
But not everybody is up in arms over the new budget. The Environmental Defense Fund sees a bit of good in the fine print.
It notes that the Legislature has approved language related to the state’s cap-and-trade linkage with Quebec, the first link in what could become a chain of sub-national governments partnering to tackle climate change.
“EDF appreciates the interest that the Legislature has taken in the important issue of potential linkages between California's cap-and-trade program and programs in other jurisdictions such as Quebec,” says EDF’s Derek Walker, director of Strategic Climate Initiatives. “With this budget, the Legislature is reaffirming the direction to allow linkages with other jurisdictions’ programs that meet California's high standards for environmental integrity and that will yield important environmental and economic benefits for California.”