Monday, June 27, 2011



Capitol Alert

The latest on California politics and government
June 27, 2011

SAC BEE | Capitol Alert: Jerry Brown, Democratic leaders announce budget deal

Gov. Jerry Brown and Democratic legislative leaders announced today that they have reached an agreement on a new majority-vote budget plan.

"We've had some tough discussions, but I can tell you that the Democrats in both the Senate and the Assembly have now joined with the administration and myself and we have a very good plan going forward with the budget," Brown said at a press conference in his office this afternoon.

The proposal, outlined in this post,[in box] assumes that the state will bring in an additional $4 billion in revenues in the upcoming fiscal year, based in part on higher-than-expected revenue figures in recent months. If those revenues fail to materialize, steeper cuts to programs including K-12 schools, higher education, public safety programs and In-Home Supportive Services would occur later in the year.

Capitol Alert: New Democratic budget relies on $4 billion more

Gov. Jerry Brown and legislative Democrats are hashing out a new majority-vote budget that relies on $4 billion more flowing into state coffers but "triggers" mid-year cuts to education and other programs if that money never materializes.

The trigger cuts would replace some of the most dubious solutions in the previous Democratic budget, such as selling state buildings and imposing a quarter-cent local sales tax on a majority vote, according to sources unwilling to be named. If revenues fall short, cuts would hit K-12 schools and higher education, public safety programs and In-Home Supportive Services.

A floor vote could take place as soon as Tuesday, sources said. Brown will hold a press conference with Democratic legislators at 3 p.m. today, his office announced.

Brown's intense focus on a majority-vote plan suggests the governor has moved away from his months-long effort to convince Republicans to approve taxes. Brown press secretary Gil Duran, in an interview with KPCC radio last week, called Republicans "basically moronic" and said they "aren't smart enough to write reforms."

Duran would not say Monday where Brown stands on a majority-vote budget. "There have been some serious meetings, Democratic meetings," he said.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Assembly Speaker John A. Pérez met with Brown around noon today, accompanied by their budget aides, but would not say whether they had a deal. Pérez said they were "making progress."

The new budget plan assumes an additional $4 billion in 2011-12 revenues. Sources said Democrats believe the state can be even more optimistic in light of May revenues coming in $448 million higher than estimated, mostly on strong sales tax figures.

Brown vetoed Democrats' previous majority-vote budget on June 16, less than 16 hours after lawmakers passed their package. He said that plan was "not a balanced solution" and contained "legally questionable" components.

Controller John Chiang subsequently decided last week he would not pay lawmakers under voter-approved Proposition 25. He said the Democratic budget was not balanced, but for different reasons, chiefly because he said it ran afoul of the state's Proposition 98 guarantee for school funding.

The new Democratic budget retains roughly the same $49 billion in funding for K-12 schools and community colleges that the vetoed plan included, although some of that funding could be at risk under "trigger" cuts.

The new budget includes a tax swap that redirects 1 percentage point of the statewide sales tax to counties for Brown's public safety "realignment," sources said. Under that plan, the state would redirect lower-level inmates to county jails and shift parole responsibilities. The tax swap has the added effect of reducing the state's Proposition 98 requirement for schools.

Democrats have said the public safety realignment is necessary to comply with a recent Supreme Court decision forcing the state to reduce its prison population by 30,000 inmates.

Democrats believe that securing a deal with Brown is the best way to meet Chiang's pay requirement. Chiang spokesman Garin Casaleggio said Monday the controller believes he is only authorized to determine whether a budget is balanced in the case of a gubernatorial veto. Casaleggio said that in cases where the governor signs a budget, his own Department of Finance makes a determination that the budget is balanced to satisfy a 2004 voter-approved measure, Proposition 58.

Jim Sanders contributed to this report.

Posted by Kevin Yamamura

1:00 PM |


"We have severe trigger cuts that will be triggered and go into effect (without the projected revenues)," Brown said. "And those are real."

Brown vetoed the majority-vote budget that lawmakers approved ahead of the Legislature's June 15 budget deadline, calling the package of spending cuts, funding shifts and one-time fixes "not a balanced solution." Legislators have also lost their pay in the wake of Controller John Chiang's decision that the plan approved earlier this month fails to meet the requirements for pay under the voter-approved initiative allowing the budget to be passed with a majority vote.

The governor, who has been working for months to secure Republican votes needed to hold a statewide election on expiring higher tax rates, said without a deal on his original proposal, leaders will have to "look very seriously" at using the initiative process to qualify a measure to secure future revenues.

Assembly Speaker John A. Pérez said Brown and Democrats "have not wavered in our belief that new revenues are essential" to balance the budget over the long term.

"The conversation has been started and we will keep that conversation going as we move to the ballot next year," Pérez said.

Senate Republican leader Bob Dutton criticized the plan unveiled today as a "hope without change" budget.

"This latest budget is based on the hope that $4 billion in new revenues will miraculously materialize, but does absolutely nothing to change government as usual," he said in a statement.

Read more about the plan here.


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