Thursday, May 12, 2011



Capitol Alert

Posted by Kevin Yamamura SacBee Capitol Alert |

May 12, 2011 - At long last, Assembly Republicans have issued their own budget plan.

The proposal includes: a roughly 10 percent reduction in state employee costs; health and welfare cuts rejected by legislative Democrats; taking money from redevelopment agencies; and emptying out special accounts for First 5 and mental-health programs.

The Assembly GOP budget provides K-12 schools and community colleges nearly the same amount that Gov. Jerry Brown's proposal did, absent about $450 million in supplemental funds for low-performing schools. It also provides $500 million for local law enforcement that Brown wanted to fund through a portion of higher vehicle taxes.

It does not include Brown's proposal to extend higher taxes on vehicles, sales and income, in part because it assumes California will benefit from about $5 billion in higher revenues than the Department of Finance anticipated in January. That includes $2.5 billion more already in the bank, as well as another $2.5 billion bump in 2011-12.

The Assembly Republican plan also rejects Brown's proposal to shift responsibilities to local governments.

The rare GOP budget outline comes four days before Brown will release his May budget revision, a proposal that will set the stage for the next round of negotiations to bridge a remaining $15.4 billion gap.

Legislative Republicans have long resisted issuing a full balanced budget, arguing that their ideas are never taken seriously or that Democrats now have control of the budget process and don't need GOP support. But the recent revenue spike has benefited their position, so they are moving fast to decouple taxes and education funding, the thrust of Brown's case for additional revenues.

Several of the GOP ideas would be highly contentious. It is hard to see how Democrats would slash state worker compensation by anything close to 10 percent after employees agreed to some concessions in new contracts within the last year. Assembly Republicans did not outline specific cuts but suggested the state could pursue layoffs or ramp up health care costs.

Also, the plan calls for $700 million in savings through electronic court reporting, centralizing state program eligibility reviews and contracting out services for the developmentally disabled and those in mental health facilities. The savings would come through supplanting public employee jobs.

Another hurdle would be the fact that two of the ideas would require voter approval. The plan calls for taking $2.3 billion from tobacco-tax funded First 5 and millionaire-funded Proposition 63 mental health accounts, which represents the entirety of their reserves and 2011-12 revenues. Voters rejected similar proposals in a 2009 special election, and it is hard to see Democrats getting behind a complete raid of those programs.

Assembly Republicans are relying on a redevelopment overhaul for $1 billion to $1.7 billion in revenues. Because of differing opinions in the caucus, the plan does not spell out whether to fully eliminate redevelopment, as Brown has proposed, or whether to take a smaller payment but keep the program intact, as the agencies have suggested.

They want Democrats to revisit about $1.4 billion in solutions that the governor originally proposed. That would mean further cuts to In-Home Supportive Services, developmentally disabled and welfare-to-work.

It is unclear how many of the proposals would have lasting impact; Brown has made the case that his plan solves the state's structural budget problem for the next five years rather than one time.

No comments: