Perez's budget offers public schools $5 billion more than the governor's proposal.
Assembly leader Perez drums up support for budget proposal; questions about its legality are raised
by Anthony York | LA Times Politi Cal Column
Online: June 18, 2010 | In Print: 21 June, 2010 – Sacramento - Assembly Speaker John Perez (D-Los Angeles) on Friday stood with members of the education community in Los Angeles to support his budget proposal one day after the state attorney general's office raised questions about its legality.
Perez has devised a plan -- it involves a new tax on oil extraction coupled with borrowing billions of dollars -- that would bypass the need to make many of the deep cuts proposed by Gov. Arnold Schwarzenegger. He has dubbed his plan the "California Jobs Budget," and has held news conferences with various interest groups in the Capitol extolling the proposal.
Perez's budget offers public schools $5 billion more than the governor's proposal.
"Our long-term growth directly depends on having an exceptionally well-educated work force," Perez said. "More than 35,000 education jobs are threatened by layoffs right now -- including 26,000 teachers. The California Jobs Budget protects those jobs by fully funding education and repaying local school districts."
In a letter released Thursday, Constance LeLouis, a deputy in the state attorney general's office, wrote that the Democrats' plan, which calls for borrowing $9 billion from the state's bottle deposits fund to be repaid with a new tax on oil extraction, "could be suspect" in court.
Specifically, Schwarzenegger asked the attorney general if he could provide "unqualified approving opinion" of the plan. LeLouis said the office could not, taking a "conservative approach."
"We conclude that a court could reasonably determine that the proposed transaction violates Proposition 58," she wrote.
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Education Coalition Leaders Join Speaker Pérez, Assemblymember Brownley to Unveil Plan to Save 35,000 Education Jobs
Press Release from the office of Assembly Speaker Perez
Friday, June 18 2010 - LOS ANGELES – Assembly Speaker John A. Pérez (D-Los Angeles) and Assembly Education Chair Julia Brownley (D-Santa Monica) were joined by Los Angeles Unified School District Board President Monica Garcia, California Teachers Association President David A. Sanchez and California Parent Teachers Association Vice President Suzan Solomon today to announce that over 35,000 education jobs will be saved as part of the effort to save and create hundreds of thousands of jobs and close the budget deficit under the Assembly Democrats’ California Jobs Budget proposal.
“Our long term growth directly depends on having an exceptionally well-educated work force,” Pérez said. “More than 35,000 education jobs are threatened by layoffs right now—including 26,000 teachers. The California Jobs Budget protects those jobs by fully funding education and repaying local school districts.”
“School districts in California are closing schools, shortening the school year, shutting down libraries, eliminating arts classes and team sports, and delaying the purchase of new textbooks all because of $6 billion in cuts to education spending,” Brownley said. “Thousands of school employees are being laid off. How many more sacrifices are we willing to make to our children’s future? The Assembly’s budget plan will stop this massacre before it turns our children’s dreams to nightmares.”
“LAUSD is facing devastating budget cuts and layoffs of thousands of hardworking counselors, teachers, nurses, clerical workers, and maintenance workers. Our schools will suffer, and our students will pay the price,” said Garcia. “I want to thank Speaker Pérez and his colleagues in the Assembly for facing down this crisis with a sound plan that saves jobs, protects the classroom, and reinvests in our kids, our economy, and our future.”
By securing $54 billion for California schools, the California Jobs Budget provides the funding Californians guaranteed for schools when they passed Proposition 98 in 1988. A recent poll by the Public Policy Institute of California shows Californians continue to support education, with over two-thirds wanting new revenues to spare K-12 education from budget cuts.
The California Jobs Budget makes a $3.8 Billion repayment to local school districts. The plan protects tens of thousands of jobs for teachers, aides, and counselors by fully funding Proposition 98 and eliminating portions of the “Education Credit Card” rather than accept the Governor's proposal to cut schools by $2.8 billion, which leads to thousands of lost jobs.
The California Jobs Budget fully funds education and saves or creates more than 465,000 jobs through instituting the same type of oil severance fee that every other state applies to companies that extract oil.
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California Democrats Seek $9 Billion Bond to Offset Budget Cuts
By Michael B. Marois | Bloomberg Business Week
May 25 (Bloomberg) -- Democrats in California’s Assembly proposed selling $9 billion of bonds backed by beverage recycling fees and a new tax on oil production they say can be passed without a two-thirds vote to help ease a $19 billion deficit.
Under the plan proposed by Assembly Speaker John Perez of Los Angeles, the state would sell as much as $8.9 billion of bonds backed by the unclaimed redemptions on recyclable beverage containers. Another $900 million a year would be raised with a so-called severance tax on oil taken out of the ground in California.
To make the proposal “revenue neutral,” and therefore not subject to the two-thirds requirement under the state’s constitution, the plan would increase local sales taxes by one- quarter of a cent while lowering the state’s sales tax by the same amount, Perez said. The oil tax would make up the difference.
“This is a creative approach at solving the two most urgent problems facing our state: creating jobs and closing our deficit,” Perez said.
From the money raised by the bonds, $1.1 billion would go toward specific industries such as environmental technology. It also repays local governments $900 million they lost in previous state budget deficits and gives $3.8 billion to schools above what Governor Arnold Schwarzenegger proposed. It pours $1.4 billion into job training and devotes $1.9 billion to childcare programs.
Schwarzenegger Cuts
The steps are aimed at countering Schwarzenegger’s bid to cut more than $12 billion in spending for the year beginning in July, including the elimination of the state’s main welfare program. Democrats in the Senate this week proposed raising taxes by almost $5 billion to offset some of those proposed spending reductions.
Schwarzenegger, a Republican who can’t run again because of term limits, vetoed a similar proposal passed by Democrats in 2009 that raised $7.3 billion through higher levies on oil production and retail sales, a surcharge on income taxes and a user fee on gasoline. The tax increases were coupled with $8.3 billion in spending cuts designed to make the plan revenue- neutral.
The governor has said he won’t raise taxes to close the budget gap. Democrats lack the two-thirds majority needed to pass their proposals.
‘No Real Reforms’
“The Assembly Democrats’ budget proposal includes no real spending cuts and no real reforms -- only legal gymnastics for majority vote tax increases,” said Aaron McLear, the governor’s press secretary, in an e-mail. “This practice of punishing taxpayers for Sacramento’s failure to live within its means must stop.”
Under California’s recycling law, beverage distributors pay the state 5 cents or 10 cents on each container sold in the state, depending on size. The fees are deposited in the California Beverage Container Recycling Fund. Consumers who return the containers to certified recycling centers collect redemption payments from the fund.
About 25 percent of redemption payments are left over, according to Nestle SA’s Nestle Waters North America, the largest producer of bottled water in the U.S.
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