LEGISLATURE ADOPTS DEMOCRATIC BUDGET PLAN

With the caveat - Caution: This is a preliminary analysis of the budget.  Some proposals may change as additional details become available…

Michael Bilbrey, Association 1st Vice President , California School Employees Association (CSEA) writes:

9 August 2010 -- Last week, the Legislature’s Budget Conference Committee closed out their actions by adopting the recently unveiled Democratic budget plan.

The Democratic budget plan unveiled earlier in the week by Senate pro Tempore Darrell Steinberg and Assembly Speaker John Perez provides a balanced approach, including new revenues, to address the structural budget deficit that has plagued California since Governor Schwarzenegger took office.  The Democratic plan recognizes that the Governor’s “cuts only” approach to our budget deficit hinders rather than helps economic recovery in California and places undue pressure on working families in California.

The Democratic budget plan rejects the Governor’s attempts to break the July 2009 budget promise as memorialized in AB 4X 3 and rejects the manipulation of Proposition 98. Because this proposal brings in billions in new revenues, the Proposition 98 guarantee will increase.  In order to avoid massive cuts to home care, seniors, children’s programs and the disabled, Proposition 98 may require suspension.  However, education will still be funded at over $2.3 billion above the Governor’s proposal and the education promise will be honored.

Key elements of the Democratic proposal:

● Protects critical education dollars.  Rejects the Governor's devastating cuts to education and instead funds schools at nearly $54 billion through Proposition 98 funding and accelerating at least $1.6 billion in funds owed to local school and community colleges.

● Protects against the Governor's proposals to shift costs and eliminate jobs.  Rejects the most draconian of the Governor's proposed cuts that would shift an estimated $4 billion in new costs on local governments (and therefore California taxpayers) and lead to the elimination of hundreds of thousands of police, fire, school and private sector jobs.

● Rejects economically foolish cuts to the safety net.  Rejects the Governor's wholesale elimination of safety net programs, which would actually cost the state more and damage the economy.

● Stimulates the economy through tax reform.  Makes no broad based tax increases, and instead delays new corporate tax breaks, closes the California Oil Severance Tax loophole, and reforms the tax structure to lower the overall tax burden for Californians at all income levels, while taking advantage of federal tax law to generate revenues for the state.

What’s Next?

• Now that the Legislative Conference Committee has adopted a budget, the proposal will go before the full Legislature for a vote. 
• At this point, it is unclear when that vote will take place. 
• Some provisions of the budget will require a 2/3rds vote and the initial reaction of the Governor’s office and some Republican members has been negative. 
• Once the legislature votes and approves the budget it will be presented to the Governor for his signature.